Major investors are building up their Bitcoin positions at the fastest pace in 10 years, ignoring short-term price fluctuations, writes RBC Crypto, referring based on the opinions of experts and the market metrics they provide.
Major Bitcoin holders, defined by experts as those who own 0.1% of all coins in circulation, purchased 84,000 BTC in July, worth $5.4 billion at the current market price. This is the largest accumulation of the first cryptocurrency since October 2014.
The Bitcoin rate demonstrated instability in July, combined with high volatility. After falling below $55,000 at the beginning of the month, the value of the first cryptocurrency recovered to $64,000 by the beginning of August. The final result for July was modest – only 3% growth.
The long consolidation of Bitcoin in the range from $50 thousand to $70 thousand will soon end, giving way to a new rally that will continue the growth that began at the $16 thousand mark, according to the head of the derivatives unit of the cryptocurrency exchange Bitfinex, Jag Kuner.
Expected changes in monetary policy may lead to an increase in the value of Bitcoin. The reduction in interest rates in September will create favorable conditions for the inflow of investments into spot exchange-traded Bitcoin funds, which will have a favorable effect on the rate of the first cryptocurrency.
On July 31, the US Federal Reserve kept its key rate unchanged at 5.25-5.5%. The Fed, which serves as the central bank of the United States, began raising the rate in March 2022. By July 2023, the rate had risen from near zero to 5.25-5.5%, the highest since 2001. Since then, the Fed has kept the rate unchanged.
The next meeting on the rate will be held on September 17-18, 2024, following which the Fed will present new macro forecasts along with the rate decision. The most likely scenario (89.6%) in September is considered by the market to be a rate cut by 25 bp to 5-5.2%, according to data from the FedWatch tool.
According to analysts at ING Bank, the US Federal Reserve intends to ease monetary policy. Interest rates may be lowered as early as September, and then in November and December. This decision will be based on improved economic indicators and the achievement of inflation targets in the US of 2%.
The observed influx of capital through stablecoins, cryptocurrencies pegged to the US dollar, strengthens the position of the bulls.
The total market capitalization of stablecoins increased by 2.11% in July, having reached $164 billion, the highest since April 2022. Stablecoins are fueling the bull market, often serving as fuel for crypto rallies.
Bifinex noted growing investor confidence in the cryptocurrency market amid Bitcoin’s resilience to negative news. The start of payments to creditors of the bankrupt exchange Mt. Gox and the sale of bitcoins by the German government did not have a significant impact on the rate of the first cryptocurrency in July.
Stay up to date! Subscribe to World Stock Market on Telegram.
Source: Cryptocurrency
I am an experienced journalist and writer with a career in the news industry. My focus is on covering Top News stories for World Stock Market, where I provide comprehensive analysis and commentary on markets around the world. I have expertise in writing both long-form articles and shorter pieces that deliver timely, relevant updates to readers.
