YEREVAN (CoinChapter.com) — The US Federal Reserve proposed to leave inflation fears in 2023 and implement rate cuts in 2024. Additionally, BlackRock, a multi-trillion investment company is in active discussions with the US Securities and Exchange Commission (SEC) regarding the potential approval of a spot Bitcoin ETF. Could these two events push Bitcoin to $50,000 in 2024? Let’s discuss.
Fed To Implement Interest Rate Cuts in 2024
As previously reported, the government might implement interest rate cuts after a series of quantitative tightening policies (eleven revisions) designed to battle runaway inflation.
Once inflation is under control, the Fed may cut interest rates, re-expanding the economy and lowering the cost of borrowing, which could have a potentially beneficial effect on risky assets such as cryptocurrencies and Bitcoin (BTC) specifically.
Meanwhile, the interest rate cut expectations came amidst indications of a stronger-than-expected US labor market and declining prices. Jan Hatzius, a Goldman Sachs analyst, noted that while healthy growth and labor market data suggest that “insurance cuts” are not imminent, the improved inflation news could mean that “normalization cuts” might occur a bit earlier.
Bitcoin Will Likely Benefit
He also mentioned that Federal Open Market Committee (FOMC) participants will likely remain cautious, preferring to be less optimistic in their inflation forecasts. But BlackRock executives are confident that the economic expansion will “positively boost” Bitcoin price. In a recent Bloomberg interview, Blackrock fund manager Jeffrey Rosenberg described the Fed’s current dovish policy as a “green light” for investors.
This bullish sentiment can go on for a while, at least until we get a new round of economic data, and until then the message is clear: the fed is more than willing to see an easing in financial conditions.
he added.
BlackRock Plans On Riding The Fed Risk-On Wave
Meanwhile, BlackRock itself plans to get the ‘lin’s share’ of the pie before the price shoots up. As mentioned, the financial giant is negotiating with the SEC for a potential approval of its spot Bitcoin ETF proposal.
The discussions focus on critical technical details. They involve several aspects such as custody agreements, creation and redemption mechanisms, and investor risk disclosures, essential for the approval process.
BlackRock has revised its spot Bitcoin ETF application to facilitate participation by Wall Street banks, allowing them to create new fund shares using cash rather than cryptocurrency. This revision is significant because it enables banks that face restrictions in holding cryptocurrencies to participate in the spot Bitcoin ETF.
The revised application includes a detailed description of the asset manager’s redemptions mechanism, aiming to address concerns about market manipulation and investor protection. While BlackRock’s potential impact on the cryptocurrency market is questionable, the spot Bitcoin ETF approval could push BTC price well over $50,000 in 2024.
Bitcoin to $50K? Fed BlackRock Say Yes
As of Dec 14, the BTC/USD exchange rate stood at $42,900 after a 14% month-to-date pump. Moreover, according to the latest report by CoinShares, institutional funds have been flowing into Bitcoin all year, bringing the overall investments to $1.7 billion as of the week ending Dec 10.
If Bitcoin price gets a double boost from the interest rate cuts by the Fed and BlackRock spot Bitcoin ETF, the $50,000 target could be in the bag in Q1 2024, considering the active investments.
John E Deaton, a crypto proponent and a prominent figure in the SEC vs Ripple case agreed, anticipating a price boom ahead.
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