Bitcoin
The bitcoin price has bounced back toward $70,000 per bitcoin after crashing toward $60,000 even as crypto price data showed bitcoin could be going into its biggest ever month.
Now, as the bitcoin and crypto market braces for a "big deal" China earthquake, Fed chair Jerome Powell has signaled an interest rate cut is coming this year—just as bitcoin is set to see its supply cut in its scheduled so-called halving.
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Federal Reserve chair Jerome Powell has indicated interest rates will start to fall this year, ... [+]
"Federal Reserve chair Jerome Powell warned yesterday of a risk of having to delay cuts thanks to stubborn inflationary pressures, although there was enough to reassure investors that a rate cut is coming at some point this year," Russ Mould, investment director at brokerage AJ Bell, said in emailed comments.
Earlier this week, Louis Navellier, founder of Navellier & Associates, wrote in a note seen by MarketWatch the bitcoin and crypto market "seems to be holding its breath, waiting for interest rates to give back some of its increases."
"Bitcoin continues to struggle to hold a level above its old high, and the whole crypto sector rolled over when interest rates jumped," Navellier added.
Last month, Deutsche Bank analysts predicted a June Fed interest rate cut would boost risk appetite and market liquidity. "More investors will likely seek out higher-yielding alternative assets as treasury returns decline. This flow of capital into nontraditional investment classes like cryptocurrencies could further support an ongoing rally in digital currency prices," they wrote.
Meanwhile, bitcoin is hurtling toward its next halving, its fourth such supply cut that will see the number of new bitcoin issued to so-called miners who maintain the network fall to 3.125 bitcoin per block, from 6.25 currently.
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The bitcoin price has rocketed even as the Federal Reserve has tightened monetary policy over the ... [+]
The next bitcoin halving is scheduled for April 22, though that is likely to move by a few days. The bitcoin price has historically climbed in the months following its previous halvings.
"The halving is a very strong pro-growth factor for the bitcoin price, and has already been partly in the price, but there is still high potential for further growth in the long term," Ruslan Lienkha, chief of markets at YouHodler, said in emailed comments.
"Actually, the halving is what will fundamentally support the bitcoin price during future corrections: with mining costs rising, when a price drop occurs, some miners might decide to stop mining due to unprofitability; the shrinking supply will, in turn, support the bitcoin price."
