Bitcoin: It is difficult to think of investing in today’s world and not mention bitcoin. This king of digital currency is once again in the headlines. On Monday, the price of bitcoin rose slightly to $116,527. Investors are hoping that the US Federal Reserve may cut interest rates this week. However, despite this rise, the market remains cautious and other cryptocurrencies i.e. altcoins seem to be lagging behind.
What is the reason behind bitcoin’s rise
In the last few days, bitcoin has slowly made up for its old losses. It saw a sharp decline from mid-August to early September, but now the expectations of a Fed rate cut have given it new life. Actually, when interest rates decrease, investors have more liquidity i.e. cash available. This cash inspires them to invest in risky assets like the stock market and crypto.
But there is not only happiness here, but also worry. Corporate treasuries of big companies bought bitcoin this year, which strengthened the market. But now questions are being raised whether this strategy will be effective in the long run? Especially when a company like MicroStrategy was refused inclusion in the S&P 500 index. This move has indicated that the path of corporate investment is not as easy as it seemed.
Waiting for the decision of the Federal Reserve
The eyes of the world are now on the US Federal Reserve. According to CME Fedwatch, there is a 99.6% chance that the Fed will cut rates by 25 basis points this week. At the same time, there is only a 0.4% chance that interest rates will remain unchanged. This means that the market is almost certain that there will be a cut.
But the real question is what will happen next? Fed Chair Jerome Powell has been constantly expressing concern about inflation and he has not spoken openly in favor of continuously reducing rates in the future. The pressure from the White House is definitely increasing, but the Fed’s stance is still cautious. This is the reason why there is both a little fear and a little excitement in the minds of investors.
Why are altcoins lagging behind
While bitcoin has shown a slight increase, the rest of the cryptocurrencies i.e. altcoins are not performing that well. Ethereum’s price remained stable at $4,669, while XRP declined by 1.1%. Solana fell 1.4% and Cardano lost up to 2.5%.
Talking about meme tokens, Dodgecoin showed a decline of 3.7% and a token called $TRUMP also slipped 1.3%. This clearly indicates that at the moment investors are trusting more in a stable currency like bitcoin, while their confidence in altcoins has weakened.
Crypto market picture and way forward
At present, the crypto market stands at a crossroads. On the one hand, there is an expectation of a cut in interest rates, which is likely to bring new energy. On the other hand, inflation and uncertainty of corporate investment are putting pressure on the market.
The biggest challenge for investors is in which direction they should move. Is there still room for growth in bitcoin or is it a temporary surge? How long will altcoins be able to recover from their losses? These questions are currently without answers.
It is certain that the Fed’s decision and the market’s reaction in the coming days will determine the future of crypto investors. If interest rates fall and inflation appears to be under control, bitcoin may touch new highs. But if the cautious stance remains, the market may cool down again.
Bitcoin’s current price reaching $116K is a new ray of hope for investors. However, there are many challenges with it. The Federal Reserve’s decision will determine the direction of cryptocurrencies in the coming days. It is important for investors to avoid making hasty decisions and understand market signals carefully.
Disclaimer: This article is written for the purpose of sharing information only. The information given in it is not investment advice. The cryptocurrency market is highly volatile, so seek expert advice before making any investment.
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