Bitcoin has surged back above USD 38,000 over the past few hours on Wednesday amid optimism that the US central bank may be closer to lowering borrowing costs if inflation continues to fall.
The largest cryptocurrency in terms of market capitalization rose by as much as 3.3% to 38,264 dollars, before subsequently reducing these heights. Bitcoin hit an 18-month high at 38,422 dollars on Friday, as generally low interest increases investors ‘ appetite for riskier assets such as digital tokens.
“With the reversal of interest rates, investors will return to riskier assets in search of better returns,”said Michael Savai, partner at quantitative trading firm dexterity capital.
Savai added: “This, coupled with the momentum that cryptocurrencies have built in recent months with ETFs, has made traders feel that favorable conditions for a new bullish wave are approaching .”
Fed Governor Christopher Waller said that he is optimistic about the recent slowdown in economic activity, which may indicate that the central bank’s policy is tight enough. He made the remarks as part of prepared remarks on Tuesday for an event at the American Enterprise Institute in Washington.
On the other hand, the president of the Federal Reserve Bank of Chicago, Austan Goolsbee, said that he believes that inflation is falling at a pace not seen since the fifties.
“Food price inflation has been well above comfortable levels for ordinary Americans,”Goolsbee said in brief welcoming remarks at the bank’s annual Agricultural Outlook Conference.
