According to one analyst, the key to predicting whether Bitcoin will surpass its all-time high of $73,700 in 2024 lies in 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 crucial indicator for Bitcoin’s price movement. He suggests that for Bitcoin to reach a sustainable all-time high, 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 rate falls within the desired range, Bitcoin could reach a price of $100,000 by the fourth quarter of 2024 or the second quarter of 2025.
Lowering interest rates by the Federal Reserve typically leads to a decrease in the high yield rate. A recent survey conducted by Reuters revealed that almost two-thirds of economists expect the Federal Reserve to lower interest rates in September. This is significant for crypto traders, as lower interest rates usually result in lower yields for safe-haven investments like bonds and term deposits. As a result, more investors tend to turn to riskier assets like Bitcoin in search of higher returns.
Peterson also notes that markets are typically flat and volatile between September and October, but with the upcoming U.S. election in November, he expects even higher levels of uncertainty. On the other hand, crypto analyst Scott Melker, also known as “The Wolf of All Streets,” believes that a Fed pivot, or a change in interest rates, may not always be favorable for assets outside of fixed-income investments. He suggests that rate cuts often precede major market dips.
It’s important to note that this article does not provide investment advice or recommendations. All investments and trading decisions involve risks, and readers should conduct their own research before making any decisions.