Bitcoin is rallying due to interest rate forecasts, says Coinjournal’s Dan Ashmore

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key takeaways

  • Bitcoin is trading above the $28k level for the first time since June 2022.

  • CoinJournal’s Dan Ashmore believes that the interest rate forecast is responsible for the ongoing rally by bitcoin and other cryptocurrencies.

  • Many in the market still consider the recent banking crisis as the reason why investors are entering the crypto market.

Interest Rate Predictions Behind Bitcoin’s Rally

Bitcoin, the world’s largest cryptocurrency by market cap, has been performing spectacularly over the past few weeks. at press time, bitcoin price With a growth of 13% in the last seven days, it stands at $28,411.

Many in the crypto space blame the ongoing crypto rally for the collapse of some banks, including signature bankSilvergate Bank and Silicon Valley Bank.

However, during an interview with CNBC, CoinJournal’s Dan Ashmore explained that bitcoin’s rally has more to do with interest rate forecasts rather than the recent banking crisis.

Ashmore said of the ongoing rally;

“This is a reaction to the complete flip in interest rate forecasts in the broader economy. If you go back before the collapse of Silicon Valley Bank, there was an 83% chance that interest rates would rise by 100 basis points by summer. Today, when When we look at it, it’s the complete opposite, and rates get cut almost 100%.”

He added that the crypto market is reacting to the possibility that the Fed’s recent interest rate hike is coming to an end.

Interest rate cut is music for crypto investors

With bitcoin trading at $28k per coin, investors will be optimistic that the price could move higher in the coming days and weeks.

According to Ashmore, cryptocurrencies trade as risk-on assets, and an interest rate cut is music to crypto investors’ ears.

Ashmore also discussed the relationship between cryptocurrencies and tech stocks. According to the Coinjournal analyst, while many expect crypto to be an independent hedge, the asset is still highly correlated to the stock market, especially tech stocks. he concluded

“The NASDAQ index rises, so does the price of bitcoin. The NASDAQ falls, and bitcoin falls a little more. The past few weeks have been interesting because bitcoin has outperformed the NASDAQ. But this is a reflection of the fact that bitcoin trading in relation to interest rate forecasts.”

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