att Hougan the CIO of Bitwise exchange says that a new parabolic phase for Bitcoin may have been triggered by the dovish comments made by the head of the Federal Reserve, Jerome Powell during last Friday’s meeting.
Powell's Remarks and Market Implications
Powell signaled that further rate cuts were very likely in the near future, which created a lot of optimism amongst investors regarding the future of the crypto market. Moreover CME Futures are now showing a 100 percent chance that the next FOMC meeting will result in rate cuts.
Why Bitcoin’s Price Might Rise
In the past, rate cuts have been a positive factor for riskier assets such as Bitcoin, which is considered high-risk. Lower rates stimulate the economy as more money and liquidity is injected in the economy and increase optimism for market prices.
Potential Challenges
Although rate cuts could be a positive factor for the market, it would not be wise to not take into consideration the political and geopolitical uncertainties such as the elections, and potential war between Iran and Israel that could affect the market as a whole. Moreover, further Bitcoin selling pressure could arise from Mt. Gox and the US government in the next few months.
Bitcoin’s New Bull Era Is Here
Although many crypto leaders are optimistic, there are still some obstacles in front of Bitcoin, but according to Hougan, Powell’s statement is the starting point of a new era for it, and investors should not stay away from the market if it enters the phase of a bull which historically occurs during the halving and election years.
