Bitcoin surges 7.5% as global central banks ease

Bitcoin (BTC) saw a significant increase of over 7.5% in a single day on Wednesday, reaching $66,250, marking its largest jump in almost two months.

This surge came after reports revealed that El Salvador had accumulated 5,750 BTC, valued at over $378 million. Twitter founder Jack Dorsey also predicted that Bitcoin could reach $1 million within six years.

The rally coincided with weak economic data in the U.S., raising the possibility of the Federal Reserve (Fed) implementing rate cuts alongside other advanced economies in the coming months.

Reports showed that consumer prices rose less than expected in April, indicating a downward trend in the cost of living. Retail sales growth also stalled, prompting expectations for Fed rate cuts starting in September and a slowdown in quantitative tightening in June.

A global monetary shift

The Fed’s move toward monetary easing is mirrored by other central banks, with expectations for rate cuts from the Bank of England and the European Central Bank in June. The Swiss National Bank and Sweden’s Riksbank have already reduced their benchmark rates.

This trend of central banks globally easing monetary policies is positive for risk assets, including cryptocurrencies, as it could improve market liquidity.

As central banks continue to ease liquidity, equities are expected to receive support, giving investors confidence to take on more risk in the market, as reported by Pepperstone.

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