Interest rate cuts in 2024 could trigger explosive Bitcoin growth

The consensus on Wall Street is that the first interest rate cuts from the US Federal Reserve will not be long in coming. The big question is when the interest rate cuts will begin and in particular by what percentage the interest rate will fall in 2024. There is at least one trader in the options market who is betting on the Federal Reserve to cut interest rates by 2.5 percent.

The chance of that seems slim at the moment, as the retailer paid $13 million and stands to earn $200 million if interest rates fall to the 2.0 percent he forecast in 2024.

But of course the big question for us is what these predictions mean for the Bitcoin price…

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What does the market actually expect from interest rates?

The current state of affairs on the futures market with regard to the US Federal Reserve interest rate is as follows:


In this chart, we see that the market expects interest rates to have fallen by 0.974 percent from the current 5.328 percent after December 18, 2024 (the last interest rate meeting next year). That would result in an interest rate of 4.353 percent.


The graphic above shows how the market has already developed… seven times has committed to the first interest rate cuts by the US Federal Reserve. In this respect, it remains to be seen whether the current expectation that the first interest rate cut will not be long in coming will actually come true.

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This will also depend on the development of inflation in the USA. It is currently expected that the consumer price index will be well above the Federal Reserve’s target of 2.0 percent in 12 and 60 months.

So the big question is Why Many people expect interest rates to fall in the relatively short term.

Given these inflation expectations, it will likely be some time before interest rate cuts begin…would the market still bet on a recession in 2024? In my opinion it looks very similar.

What does this mean for the Bitcoin price?

For the price of Bitcoin, the main thing you hope is that this is what we get soft landing get what many people currently want. This would mean a soft landing despite the Federal Reserve’s aggressive interest rate hikes no recession to get.

Given the history of almost every interest rate campaign being followed by a recession, the chance of avoiding a recession seems slim.

But if we don’t experience the recession and add the American Spot Bitcoin ETF and the Bitcoin halving early next year, then 2024 could be a gigantic blast for the Bitcoin price.

If there is a recession, I expect a short decline, but in the long run it won’t matter much. Interest rates are also likely to fall back to zero due to the American government’s almost unsustainable debt.

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