Canada and the European Central Bank cut interest rates earlier this month, kicking off loose monetary policies for major global economies. On the 15th, Forbes magazine mentioned the potential of cryptocurrencies, pointing out that central banks around the world have begun cutting interest rates. As global central banks release ample market liquidity, it is expected to support the rise in cryptocurrency prices.
Forbes senior contributor Billy Bambrough wrote on the 15th that after Bitcoin spot ETFs were approved in the United States, Bernstein analysts are optimistic that by the middle of next year, the market value of Bitcoin will surge from the current $1.3 trillion to $4 trillion. At the same time, Wall Street is also preparing to embrace spot ETFs of cryptocurrencies like Ethereum and Ripple.
The article mentioned that the Federal Reserve recently quietly admitted that gold is replacing the US dollar. The International Monetary Fund (IMF) also issued a warning in a recent report, noting a significant decline in the proportion of the US dollar in foreign exchange reserves of central banks and governments.
The New York Federal Reserve released a report on the 3rd indicating a decrease in the proportion of the US dollar in official reserves and an increase in gold holdings by central banks, but the report mentioned that this trend is limited to “a few countries.”
Billy Bambrough noted that some commentators disagree with the New York Federal Reserve’s statement. Balaji Srinivasan, former CTO of Coinbase, pointed out that the “few countries” mentioned by the Federal Reserve represent 3 billion people, meaning that 37.5% of the global population is shifting from the US dollar to gold.
The article pointed out that some commentators are more bullish on the potential of Bitcoin. Billionaire and founder/CEO of Social Capital Chamath Palihapitiya predicts that as countries adopt Bitcoin, it could “completely replace gold,” pushing its market value to $15.7 trillion, equivalent to gold. Independent presidential candidate Robert F. Kennedy Jr. believes that Bitcoin is the only way to save the US dollar.
Will the rate cut tide support the booming currency market? It is noteworthy that the article pointed out that as the US dollar’s position is declining, the Federal Reserve is preparing to start cutting interest rates after a 2-year battle against inflation, following the historic COVID-19 pandemic stimulus and quantitative easing measures.
Quoting a Bitfinex analyst, the article indicates that central banks around the world have begun cutting interest rates, signaling the beginning of a loose monetary trend. It appears likely that the Bank of England and the Federal Reserve will follow suit in cutting interest rates in the coming months. This global liquidity cycle suggests an increase in money supply, which will support asset price increases, including cryptocurrencies.