BTC/USD: Bitcoin Prices Top $116,000 as Traders Ramp Up Risk Bets Ahead of Big Fed Event

💸 Bitcoin Jumps Ahead of Rate Meeting

• Bitcoin prices

  

  BTCUSD got a lift Saturday, pushing past the $116,000 handle in early-morning trading as crypto bros were getting excited about the prospects of next week. And namely, one key event.

• It’s Fed week next week and Jay Powell is getting ready to make or break your portfolio… indirectly (nothing personal). The man who moves markets with a simple “Good afternoon” will take the podium on Wednesday to say whether the Fed has decided to lower interest rates.

• And that’s what’s keeping the prices of Bitcoin well bid. With a few days until the big event, Bitcoin maxis are betting that Powell will trim borrowing costs by 25 basis points. Some go even higher, saying they expect a jumbo-sized 50-basis-point cut.

🔥 Bitcoin and Lower Rates

• In the buildup to that decision, Bitcoin is looking to book its fourth day of gains, adding a total of 5% to its valuation, from around $110,000 to current market prices. Why is Bitcoin soaking up fresh cash to its market cap?

• Lower rates typically benefit risk assets. And what’s riskier than a digital currency that’s relatively heavy at a $2.3 trillion valuation? Bitcoin benefits from more affordable cash because people tend to favor spending when it costs them less to pay it back.

• And where is that more affordable cash going? Liquidity (hopefully you’re not exit liquidity). More liquid markets are a primary consequence of lower borrowing costs. This is also why tech stocks tend to do better in a low-rate environment.

👀 Other Notable Movers

• What else is going on? Ethereum

  

  ETHUSD is doing pretty good, too. The second-largest token is up about 5% over the past day, floating near $4,800 as traders try to figure out if the $5,000 record was the end or the beginning. Ether is up 10% in the past week.

• Solana

  

  SOLUSD, a rival of Ethereum, is doing even better. In the past week, the token advanced a solid 20%, taking its price near $250. In other words, just about 40 bucks of ground to cover before we do a “New record high” story.

• Other notable moves on the crypto board include Dogecoin’s 40% jump in the past week and XRP’s 13% increase for the same time. As usual, do your own research, plan carefully ahead of the Fed event, and make sure your stop losses are in place. It may get wild out there.