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- Stock and crypto markets soared after the Fed held interest rates and hinted on Wednesday that more cuts are coming.
- One analyst said Bitcoin could reach a new all-time high above the $100,000 mark as early as May.
- Some Bitcoin options traders are also betting the cryptocurrency will hit those levels by the summer.
Bitcoin will reach $100,000 before the end of May thanks to Federal Reserve officials indicating that rate cuts are coming.
That’s according to Jonathan de Wet, chief investment officer at crypto capital markets firm Zerocap, who told DL News that his firm sees a rise in Bitcoin’s price prior to the halving event in April to $80,000.
It will then break above $100,000 the following month, he said. “The Fed’s stance last night has reinforced this thesis.”
The prediction comes after the US central bank said on Wednesday that it will keep rates within the 5.25% to 5.5% range for now, but that it expects to slash interest rates by three-quarters of a percentage point in 2024.
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Traders cheered the news, piling into risk-on assets like stocks and crypto. The benchmark S&P 500 soared to a record high. Bitcoin rose 10% to $68,150.
Zerocap’s prediction aligns with some traders in the options market. About 2,400 bullish Bitcoin bets that expire at the end of June are for the price to reach above $100,000, according to data from derivatives platform Deribit.
But the majority of open contracts on price gains for that time period — some 18,000 — put the future price in the $60,000 to $85,000 range.
Bitcoin reached a new all-time high of $73,700 on March 14.
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Since then, however, the world’s biggest cryptocurrency by total market value has slumped.
The halving, estimated to hit on April 20, is expected to shore up the price. will slash miner rewards by half as part of a programmed event designed to trim supply and — in theory — support a higher Bitcoin price.
Today’s 900 newly mined Bitcoin each day will drop to about 450 post halving.
The Federal Reserve’s expected cuts, the halving, and buzz around spot Bitcoin exchange traded funds have been identified as key drivers behind the recent rally.
“This is why Bitcoin completely reversed its entire drop from yesterday, and Ethereum and other alts followed,” Pratik Kala, senior digital asset investment analyst at crypto fund manager DigitalX, told DL News.
Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at [email protected].