The world’s largest cryptocurrency, Bitcoin, has jumped back to $106k today after dipping to some of its weekend losses around $103k. The surge comes right after as the Federal Reserve hints at a possible change in its strict money policy later this year.
Therefore, traders are bullish on the bitcoin surge.
Powell Hints at Softer Money Policy
Speaking at an event for the Fed’s International Finance (IF) Division, Powell said their work helps understand the world’s economy and all the risks. He didn’t mention interest rates directly, but he did say that global data matters a lot now..
Powell’s comments didn’t go unnoticed. Investors saw them as a quiet sign that the Fed is starting to think about changing its current tight money approach if economic trends keep heading in the right direction.
Why This Could Be Good News for Bitcoin
This talk of a softer policy shift is good news for Bitcoin and other riskier assets. Eventually, the inflation is slowing down, and jobs are steady. Currently, inflation is at 2.3%, close to the Fed’s 2% goal.
Meanwhile, the Unemployment rate is also around 4.2%, showing that people are still working and the economy is okay.
Even though Powell didn’t say there will be cuts soon, he said that global data is very important. Traders think this could mean the Fed might lower rates later if inflation keeps falling and jobs stay strong.
Lower rates make it easier to borrow money, which usually helps things like Bitcoin go up.
Cautious Approach, But Market’s Ready
For now, the Fed is being careful. Most traders think rates will stay steady at the June meeting. The CME FedWatch Tool shows a 95.3% chance of no change in rates next month. Only a small chance of a cut is expected.
This careful but open approach has traders hopeful that Bitcoin and other cryptos will see more gains soon.
As of now, Bitcoin is trading around $105,253, reflecting a slight drop seen in the last 24 hours.
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