Why the Crypto Market Is Up Today? Here’s The Major Catalysts For Rally
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Bitcoin, facing a sudden downturn earlier in the week that drove its value to a low of $40,000, has defied expectations with a rapid resurgence. By Wednesday, it had not only recovered its losses but also soared past the $43,000 mark.
FED Hints 2024 Rate Cuts
A key driver behind the surge in the crypto market is the recent announcement by the U.S. Federal Reserve, which decided to maintain its interest rate within the range of 5.25% and 5.50% on Wednesday. While keeping the current Fed funds rate range unchanged, they adjusted their prediction for the end of 2024, lowering it from 5.1% to 4.6%.
Looking ahead, the Fed’s latest predictions show a core inflation rate of 3.2% post-2023, down from the previous estimate of 3.7% in the last three months. Meanwhile, the outlook for real GDP growth in 2024 has also been adjusted downward, settling at 1.4%, slightly lower than the previous estimate of 1.5%.
New Change In Accounting Rule
U.S.-based firms may witness a new wave of adoption for Bitcoin and other cryptocurrencies following a recent accounting rule change on December 13. This change allows crypto-holding companies to report not only losses but also paper gains, potentially boosting confidence among them.
This adjustment is expected to encourage more firms, including giants like MicroStrategy and Tesla, to view Bitcoin as a strategic financial asset.
Bitcoin Minning Difficulty Decrease
Another catalyst for the crypto market’s surge is Bitcoin’s difficulty saw a noteworthy 0.96% reduction at block height 820,512—the first decrease in the past six adjustments.
Meanwhile, the current difficulty, standing at 67.31 trillion, will persist for the next 12 days until December 23, 2023. While this decrease benefits miners by simplifying the process of finding a block reward, it has not resulted in an immediate increase in the hashrate.
At the same time, the hype of Spot Bitcoin ETF approval looms along with the upcoming halving event, which is expected to take place in April, which will further limit the supply of Bitcoin for potential investors and will also likely push prices higher.
Filed under: Bitcoin - @ December 14, 2023 6:21 am