The push-and-pull effect leading to the stabilization of the largest cryptocurrency by market cap could be influenced by several key factors, which Mr. Iuorio explained in a recent analysis of the flagship digital asset for the CME Group on March 17. One of these factors, according to him, is “the US dollar’s recent strength amid geopolitical risk.” As the USD weakens and inflation increases under the influence of ongoing geopolitical turmoil, many people have flocked to Bitcoin, considering the cryptocurrency to be a safe haven against inflation.
Interest rate hike
The second factor Iuorio points out is the Federal Reserve’s “continued plan to hike interest rates” as it scales back its bond-buying program. Recently, the Fed pressed on with interest rate hike plans after reducing its monthly bond purchases in December 2021. Following the two-day Fed meeting, the dollar index fell as much as 0.6% on Wednesday, March 16, as per MarketWatch data. Finally, the third factor for BTC stabilization is “the continued talk of more government regulation.” As cryptocurrencies like Bitcoin become more regulated, accountable, and transparent, people will be more comfortable using them. Iuorio explained that Bitcoin supporters argue that the key component of crypto is its ability to transfer and store wealth outside the banking system. In other words, people may turn to cryptocurrencies to avoid these seizures.
Bright future for Bitcoin?
What’s more, Finbold recently reported on Bloomberg’s senior commodities Mike McGlone’s position that 2022 may be a good year for risk-asset reversal, considering the current sentiment with the Fed, inflation, and war. He said it was “unlikely for Bitcoin to stop outperforming gold, stock market amid bumps in the road as the Fed attempts another rate-hike cycle.” At press time, Bitcoin was trading at $40,858, which is a 3.96% increase from seven days before, when its price was $39,240, according to data from CoinMarketCap. Compared to the previous 24 hours, the price had recorded an increase of 0.13%.
