Tom Lee, one of the founders of Fundstrat Global Advisors, believes that lowering the FED rate will allow Bitcoin to update local highs and reach $20,000 per coin by the end of this year.
The expert explains this forecast by the fact that Bitcoin is now being used to hedge risks. When the Central Bank lowers rates, liquidity in the market rises, and investors direct funds both to high-risk instruments and to safe assets for hedging.
Now, according to some experts, Bitcoin has begun to be used as a new safe asset, which with a decrease in the Fed rate, will lead to a rise in demand for it and will contribute to a price increase.
Meanwhile, this mechanism may not work. So, the head of the FED, Jerome Powell, recently noted that it is likely that the presence of a global cryptocurrency could eliminate the need for reserve currencies. However, while Bitcoin is used only as a speculative asset and means of accumulation, but not as a means of payment.
The first stage in reducing interest rates for the first time in ten years was carried out by the FED on July 31.