Recently, Jerome Powell, the Chairman of the US Federal Reserve, hinted that it will cut interest rates in September. So, the cryptocurrency sector is likely to see big moves next month. Bitcoin is currently at $63,051.88. It has fallen by about 6.6% in the last 30 days. Could the proposed economic actions affect the BTC price? Review!
US Federal Reserve Chairman Makes Loud Statement on Rate Cuts
It was during his speech at the Jackson Hole Economic Symposium that Powell gave a sensational phrase about a possible rate cut. When we analyze his statement, we understand that the US administration no longer considers inflation a threat, but for them the biggest threat is the risk to jobs.
The US Economy in August 2024: An Overview
The civilian unemployment rate in the United States is currently 4.3%. While it was 14.8% in April 2020, it fell to 3.4% in April 2023. The rate has been steadily rising this year. At the beginning of the year, in January 2024, it was almost 3.7%. In May, it surpassed the 4.0% mark. Last month, it was 4.1%.
It seems that the US administration is concerned about the current employment trend in the US, which looks quite dismal.
Impact of US Fed rate cut
Lowering interest rates usually stimulates the economy because it makes borrowing cheaper. The proposed interest rate cut in the U.S. will pump more money into the economy. This will stimulate spending and investment.
What Bitcoin Enthusiasts Can Expect
Naturally, a rate cut makes bonds unattractive. This means that there is a chance that funds currently in bonds may be diverted to the crypto market. There have been several cases in the past that support the theory that a Fed rate cut has a positive effect on the price of BTC.
Let’s take a look at what happened in the BTC market in March 2020.
Despite the fact that the global economy was experiencing a severe pandemic, even in the conditions of uncertainty, the Bitcoin market demonstrated steady growth and was virtually unaffected by the global economic downturn.
In conclusion, we can expect a big boost in the crypto market, especially in the Bitcoin market in the coming months. Could this be the start of the next BTC bull run? Do you agree? Comment!
Also Read: Ethereum News: ETH Price Falls Again! Will This Cause the Next Crypto Crash?
