An analyst suggests that the key to predicting whether Bitcoin will reach its all-time high of $73,700 in 2024 lies with the United States Federal Reserve. Timothy Peterson, founder and investment manager of Cane Island Alternative Advisors, believes that the U.S. high yield rate is a crucial indicator for Bitcoin’s price movement. He states that the rate needs to drop below 6 or 7% for Bitcoin to sustain an all-time high. Currently, the U.S. high yield rate stands at 7.54%. Peterson predicts that if the rate falls within the desired range, Bitcoin could reach $100,000 by Q4 2024 or Q2 2025 at the latest.
Historically, when the Federal Reserve lowers interest rates, the high-yield rate tends to follow suit. A recent survey conducted by Reuters reveals that almost two-thirds of economists predict a decrease in interest rates in September. Lower interest rates are significant for crypto traders as they result in reduced yields for safe-haven securities like bonds and term deposits. Consequently, more investors turn to riskier assets such as Bitcoin to achieve higher returns on investment.
Peterson also notes that the market is typically “flat and volatile” between September and October. However, with the upcoming U.S. election, he expects higher uncertainty throughout October leading up to Election Day on November 4th.
On the other hand, crypto analyst Scott Melker, also known as “The Wolf of All Streets,” disagrees with the notion that a Fed pivot is always beneficial for assets beyond fixed-income investments. He states that rate cuts often precede major market downturns.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and assessment of risks before making any investment or trading decisions.