A potential surprise Federal Reserve interest rate cut could lead to a significant increase in Bitcoin’s market value, possibly exceeding $140,000. The current rate is at 4%, and a decrease could push investors away from fixed income assets, motivating a shift towards risk assets such as Bitcoin. Market expectations indicate a 97% chance of no rate change at the upcoming Federal Open Market Committee meeting, amidst strong macroeconomic data and easing inflation. In the second quarter, the U.S. economy saw a 3% annualized growth rate, and the probability of a recession has dropped notably. A rate cut to 3.75% may enhance Bitcoin's appeal as lower interest rates generally accommodate greater liquidity and spending, fueling economic activity. Should Bitcoin reach $140,000, it would imply a market capitalization of $2.78 trillion. While the likelihood of an immediate rate cut remains low, Bitcoin could greatly benefit if it occurs, potentially outperforming traditional assets like the S&P 500, which has less room for significant gains.

Source 🔗