Dovish Fed Adds Fuel to Bullish Fervor in Bitcoin and Gold
Gold and Bitcoin spurred higher by the prospect of lower interest rates
Gold and Bitcoin have rallied thanks to a Dovish Federal Reserve. BTC is currently trading at $11,420 and spot gold at $1,430. Both these assets received a bullish boost last week when the Fed made dovish noises and said interest rates would be maintained in the range of 2.25%-2.5%.
A lenient Fed translates into a weaker dollar – which enhances the appeal and valuation of dollar-priced alternative assets such as BTC and gold. Some investors have started to expect an interest rate cut as early as July.
Central banks positive to crypto
BTC, the dominant cryptocurrency, was also boosted by Bank of England Governor Mark Carney’s Thursday speech, in which he gave Facebook’s proposed digital currency Libra a cautious welcome. However, Carney was unequivocal that digital money should be stringently regulated.
Across the Atlantic, Fed Chairman Jerome Powell said last week that Facebook spoke to the Fed about Libra. “There are potential benefits here; there are also potential risks, particularly of a currency that could potentially have large application,” Powell said.
Geopolitical factors also playing a role
However, other factors have contributed to the rise in BTC and gold. These include the Brexit turmoil, Iran-US tensions, and the protests in Hong Kong.
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