Gold and Bitcoin are rushing to new price records

Bitcoin has been popularly referred to as digital gold for several years. Most recently, the two assets actually developed in pairs upwards.

Gold reached a new all-time high overnight. With a price of $2,135, the precious metal was more expensive than ever before.

The price rally had already started on Friday and continued unabated over the weekend.

The prospect of lower key interest rates is boosting prices

The same applies to Bitcoin. The mother of all cryptocurrencies set off on a new high yesterday evening, which is currently continuing. The price has already exceeded $41,500, reaching its highest value in around a year and a half.

Gold investors are apparently in good spirits that key interest rates in the USA have reached their peak. After all, investors experienced numerous increases in order to get high inflation under control. The measures taken by the US Federal Reserve now appear to be having a lasting effect. Investors are therefore hoping for key interest rate cuts soon.

These are known to stimulate the markets. Optimists even believe that the first interest rate cuts could become reality in just a few months. But this only applies if inflation continues to fall.

Gold’s interest rate disadvantage could soon disappear

Then gold becomes interesting for investors. Finally, the interest rate disadvantage that gold has compared to other assets on the financial market melts away. The precious metal is considered a crisis currency, but it does not pay any interest. Profits can only be realized through price increases. The lower the key interest rates, the less advantage other assets that are dependent on the key interest rates have. This automatically makes gold more attractive.

Bitcoin also benefits from lower interest rates. These pour more money into the financial markets and encourage investors to increase their risk. Then volatile assets like Bitcoin or other cryptocurrencies become more interesting. This also applies to new coins like Bitcoin ETF, which are now looking for investors in the presale.

Will the next boost come on Friday?

The trigger for the optimism was apparently a speech by US Federal Reserve Chairman Jerome Powell on Friday. Although he had once again emphasized that the Fed was ready to raise key interest rates again, he also emphasized that he had already tightened the reins.

Labor market data will be published in the USA at the end of this week. These are particularly important for the Fed when it comes to analyzing the monetary policy situation and economic strength in the USA. If the results are positive, they could boost prices again.

Crypto exchanges with the lowest fees 2023

Author
Recent Posts

Margharet Tess

Editor, Developer at Cryptheory Labs

I have been active in the cryptocurrency world for over 6 years, during which I have written countless articles about this sector. What fascinates me most about cryptocurrencies is their technological aspect and the problems they aim to solve. In the past three years, I have ventured into app development and am currently working on a larger project called P2E Buzzer. Stay tuned for the surprise. 🙂 My previous experiences: Business2Community.com, TradingPlatforms.com

Latest posts by Margharet Tess (see all)