Bitcoin Price Falls – US Financial Policy in Focus

The price curve of the main cryptocurrency Bitcoin (BTC) has shown a slight downward trend since Sunday. Experts see this as a reaction to US fiscal policy, where the Federal Reserve will decide on the key interest rate today.

The hoped-for Christmas rally of Bitcoin (BTC) is experiencing a setback. The price curve is down for the third day in a row and Bitcoin has fallen back to a price level of around $41,000. At the end of last week, BTC was still trading at over $43,000. Experts believe that uncertainties about US financial policy are also affecting Bitcoin.

Read more about the price of Bitcoin and find the latest financial news of the day with the Born2Invest mobile app.

In the US, as in Europe, high inflation rates since the beginning of 2022 have forced central banks to gradually raise key interest rates to record levels

This is not necessarily helpful for Bitcoin and co. because investors can also expect good interest rates on low-risk government bonds in this environment. The US Federal Reserve is now discussing the key interest rate on December 13th (Wednesday) and the European Central Bank (ECB) on December 14th. Both face a difficult decision. On the one hand, inflation appears to be contained, which could allow a pause in interest rate hikes or even a reduction in the key interest rate.

On the other hand, the US labor market is running hot and the inflation rate is still just above the targeted 2%. Many analysts are therefore predicting that the high key interest rates will not be changed for the time being and that cuts are not expected until 2024. Bitcoin (BTC) is not the only cryptocurrency to react to the situation; the stock markets are also undecided.

This is also causing the so-called altcoin season on the crypto markets to stall. Although prominent representatives such as Solana (SOL) and Avalanche (AVAX) are still up significantly over the past seven days, they are now correcting where Bitcoin is no longer driving the overall market.

Conclusion: Bitcoin and co. hope for stimulus

A cut in key interest rates in the US or the Eurozone could play into the hands of Bitcoin, Solana and co. and trigger a resumption of the Christmas rally. But that does not look likely. A decision by the US Securities and Exchange Commission (SEC) on Bitcoin ETFs is also still pending. Optimistic forecasts for Bitcoin have led to significant gains since mid-October.

Experts have identified January 10, 2024 as the date by which the SEC could give the green light for Bitcoin ETFs. There are many indications that the crypto markets are entering a phase where patience is required.

__

(Featured image by Michael Förtsch via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us