Will Bitcoin ETFs Soar on Sooner-Than-Expected Fed Rate Cut?

Bitcoin has surpassed the $71,000 mark, indicating increasing market confidence in possible interest rate cuts by the Federal Reserve. This daily streak of gains was the longest in three months, just 4% below the all-time high of $73,798 set in mid-March, according to Bloomberg.

Investors should also note that the short-term correlation between Bitcoin and the Nasdaq 100 Index is at its highest level since early 2023, indicating that further gains in the tech-heavy index could coincide with a rally in the crypto market leader.

ETFs such as Grayscale Bitcoin Trust GBTC, iShares Bitcoin Trust IBIT, Fidelity Wise Origin Bitcoin Fund FBTC, ProShares Bitcoin Strategy ETF BITO, ARK 21Shares Bitcoin ETF ARKB, and Bitwise Bitcoin ETF Trust BITB should now be in focus.

Will the Fed Cut Interest Rate Soon?

Investors are increasingly pricing in the possibility of a Fed rate cut in early September, following data pointing to a slowdown in US inflation and a softening in the labor market. Inflation, which continues to rise in the first quarter of 2024, is finally showing signs of cooling. Additionally, the manufacturing sector slowed down further in May. Job opportunities have also fallen to their lowest level in the last 3 years.

According to the CME Fedwatch Tool, the probability of a 25 basis point rate cut by the Fed in September increased to 55.3% from 51.3% recorded on June 3, 2024. Leveraging speculative assets such as cryptocurrencies. The benchmark US treasury yield fell to 4.33% on June 4, from 4.61% recorded on May 29, 2024.

Tom Couture, Vice President of Digital Asset Strategy at Fundstrat Global Advisors, noted that crypto assets responded positively to the decline in rates. Despite recent struggles to keep levels above $70,000, optimism remains due to inflows into US ETFs and progress towards crypto regulatory frameworks in Washington.

Is There an Rising Expectation for Bitcoin?

Galaxy Digital CEO Michael Novogratz expressed optimism about a more favorable political environment in the US for digital assets, predicting that Bitcoin could reach a record $100,000 or higher by the end of the year, as quoted on Bloomberg.

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Grayscale Bitcoin Trust ETF (GBTC): ETF Research Reports

ProShares Bitcoin Strategy ETF (BITO): ETF Research Reports

iShares Bitcoin Trust (IBIT): ETF Research Reports

Fidelity Wise Origin Bitcoin Fund (FBTC): ETF Research Reports

ARK 21Shares Bitcoin ETF (ARKB): ETF Research Reports

The story continues

Bitwise Bitcoin ETF (BITB): ETF Research Reports

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