On Thursday, the US Federal Reserve announced that they would be lowering rates for the first time since 2008, more than 10 years ago. On the announcement, Bitcoin’s price gained about 2 percent. The US Federal Reserve plans to lower interest rates by .25 percent to help compensate for a slowing economy and ongoing US-China trade tensions. The last time that the US lowered rates, Bitcoin was not in existence.
Bitcoin’s rise began a couple of hours before the announcement indicating that it’s possible that there was some insider knowledge at play. Bitcoin’s incline continued after the announcement as well, pushing the daily gains to well over 2 percent. Many believe that the rate cut will help BTC along in its recovery from rock-bottom prices earlier this year. As a result of the lower rate, experts believe that there will be less reason to hold USD and more reason to invest it in other commodities and investments such as Bitcoin and other cryptocurrencies.
It’s also believed that the Federal Reserve will continue to hand out rate cuts as needed. Another possible catalyst for Bitcoin is on the horizon as the mining reward is scheduled to be halved a year from now. Halving typically occurs in a rise in scarcity, which drives the value of the currency up. Bitcoin continues to hold well at previously established levels while investors are on the lookout for a convincing breakout above the $11k level.
In recent weeks, Bitcoin has been dormant after a very sharp incline to nearly $14k. Sentiment appears to be positive for the time-being, and Bitcoin being seen as the beneficiary of an announcement by the US government bodes well for its reputation and the likelihood that institutional investors are taking notice of Bitcoin.