According to one analyst, the key factor in determining whether Bitcoin will surpass its all-time high of $73,700 in 2024 is the actions of the United States Federal Reserve. Timothy Peterson, the founder and investment manager of Cane Island Alternative Advisors, believes that the U.S. high yield rate is a critical indicator to watch. For Bitcoin to reach a sustainable all-time high, Peterson suggests that the high yield rate needs to drop below 6 or 7%. Currently, the U.S. high yield rate stands at 7.54%. Peterson predicts that if the yield rates fall within the desired range, Bitcoin could reach $100,000 by the fourth quarter of 2024 or the second quarter of 2025.
Traditionally, when the Federal Reserve lowers interest rates, the high-yield rate follows suit. A recent survey conducted by Reuters reveals that nearly two-thirds of economists expect the Federal Reserve to lower interest rates in September. Lower interest rates are important for crypto traders as they typically lead to lower yields for safe-haven investments like bonds. Consequently, more investors turn to riskier assets like Bitcoin in search of higher returns.
Peterson also notes that the overall market tends to be “flat and volatile” between September and October, although this is not always the case. However, with the upcoming U.S. election, he expects higher uncertainty throughout October leading up to the election day on November 4.
Crypto analyst Scott Melker, known as “The Wolf of All Streets,” disagrees with the notion that a Fed pivot is always beneficial for assets outside of fixed-income investments. He believes that rate cuts often precede major market declines.
It is important to note that this article does not provide investment advice or recommendations. Readers should do their own research and exercise caution when making investment decisions.