Bitcoin has achieved a new record high, approaching the $72,000 threshold on Monday morning, fueled by anticipations of impending rate cuts by the Federal Reserve.
As of mid-morning, the leading cryptocurrency was valued at $71,700, marking a 3.1% increase on the day and an impressive growth of over 60% since the beginning of the year.
This upward trend in Bitcoin’s value is further propelled by investments in the recently introduced US spot Bitcoin ETFs, which have amassed more than $106 billion in cumulative flows since the year’s start.
The expectations for the Federal Reserve to lower interest rates in June were heightened following softer-than-anticipated US labor market data released last Friday.
Market predictions now indicate a 73.9% likelihood of the Fed reducing its current target rate range from 5.25-5.5% to 5-5.25% by 25 basis points in June, as per data from CME Group.
Globally, the anticipation of rate cuts has also contributed to pushing gold prices to unprecedented levels.
Last week, the LBMA London Gold Price saw a 4.2% increase, closing at $2,171.20 on Friday, which represents an 18.3% gain for 2024.
Ned Naylor-Leyland, an investment manager specializing in gold and silver at Jupiter Asset Management, commented on the situation. He stated, “Gold is inherently forward-looking and has thus largely accounted for a diminished forecast for rate cuts from the Fed in 2024, with the bond market anticipating three cuts by year-end.”
He further noted, “The market is increasingly expecting the Fed to adopt a more accommodative monetary policy stance, which is a significant factor behind the recent uptrend in gold prices.”
