According to Joe McCann, founder, and chairman of the Board of NodeSource, the U.S. Federal Reserve has paved the way and guaranteed Bitcoin’s bull run into 2020 due to the high probability for more interest rates cut. McCann’s statement was made in a tweet on August 27, 2019.
Federal Reserve and Interest Rates Cut
Interest rates cut is the Federal Reserve’s strategy to attain price stability and sustainable economic growth. The rate is either reduced or increased depending on the cash flow in the economy.
Joe McCann, on the other hand, is of the opinion that Bitcoin’s bull run well into 2020 has been paved and guaranteed by the high probability for more interest rate cut by the Federal Reserve. McCann also attached an image which shows the World Interest Rate Probabilities (WIRP) for the next Federal Open Market Committee (FOMC) meetings, where a decision will be made.
The Fed has caved and has guaranteed bitcoin’s bull run well into 2020. pic.twitter.com/Z5yZRY1VpB
— Joe McCann (@joemccann) August 27, 2019
FOMC’s Meeting in September Could Lead to 1.85% New Interest Rate
Per the image, the FOMC’s meeting slated for September 18, 2019, could lead to a cut of 25 basis points (bps) to a range between 1.75% to 2%. Moreover, there is a 90.8 percent chance for the new rate to fall between this range. It is, however, worthy to note that the anticipated rate (forward rate) that might be set next month is 1.85%.
In the same vein, the anticipated or forward interest rate during the FOMC’s meeting on October 30, 2019, and December 11, 2019, is 1.71% and 1.54% respectively. The FOMC’s meeting has also been scheduled to hold between January and September 2020. Like the case of 2019, the anticipated rates cut has been set, and the target range is between 1.39% (January 29, 2020) to 1.07% (September 16, 2020).
More Interest Rates Cuts Increases Bitcoin’s Adoption
These aside, the crypto community was quick to air their views. A user pointed out that with more interest rates cuts comes a higher adoption of Bitcoin. In the user’s opinion, each time the Fed makes interest rates cut, people tend to sell their stocks and invest in more promising ventures. One of such is Bitcoin, which has become a store of value.
On the contrary, some members of the public did not hold the same sentiment. Instead, they opined that Bitcoin proponents are always quick to take advantage of the opportunity to create narratives in hopes that the asset would overtake fiat.
Bitcoin, the crypto asset in question, is priced at $9,557, as at press time. On Wednesday, the cryptocurrency was trading around the $10,000 zone before its sudden decline from Thursday. Nonetheless, the sentiment in the market is that Bitcoin is at its final consolidation stage, where it could either dump or spike significantly.