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What Will Happen To Bitcoin Prices If The Fed Lowers Interest Rates?
‘ There is always the tension between demand and supply as well - as a peer-to-peer market, there isn’t necessarily any external force that is propping the system up… This is the opposite of fiat-world: where the ECB, for example, is bought up a strong amount of European sovereign debt - in 2022, an estimate of “only 40%” Eurozone sovereign debt. In fiat-world, there are many forced buyers, but few forced sellers. In Bitcoin, it’s the opposite - nobody is mandated to buy Bitcoin… ‘
‘ In the short term, it’s likely that cutting rates will help all risk-on assets, including Bitcoin. In the long term, it will also contrast and compare Bitcoin’s model to the fiat model - with central banks prone to reducing rates and letting money supply inflate at the first sign of real economic trouble - proving out why a scarce, distributed money rather than arbitrary dictates in the service of the few would be beneficial to many. ‘