The main analyst at the OKEx cryptocurrency exchange believes that by the end of 2019, the price of Bitcoin (BTC) could reach $ 14,000, especially if central banks around the world introduce economic incentives.
Governments in different countries are increasingly concerned about the slow pace of economic growth and how this could affect financial stability in the coming months or years.
According to a report published by an OKEx analyst, economic stimulus measures could be a catalyst for the resumption of the upward movement of the BTC.
In the United States, they are watching the actions of Federal Reserve Chairman Jerome Powell, as his comments at the annual global central bank symposium in Jackson Hole indicate a real possibility of rate cuts in the coming months.
Powell noted that, despite the fact that the US is “in a favorable situation”, they still face “significant risks”.
The data provided by the CMW FedWatch tool reflects a 95% probability of a rate cut by a quarter percentage point at the September meeting of the Federal Open Market Committee (FOMC).
The likelihood of rate cuts by a quarter point during the remaining FOMC meetings is also high – 63.7% at the meeting in October and 52.8% at the meeting in December.
Many experts predict that if the US central bank cuts interest rates, pressure on “hard assets” such as gold, diamonds and other goods will be a side effect.
The European Central Bank (ECB) is also developing a new Eurozone stimulus plan, and Asian central banks are working to lower rates.
According to one analyst, three consecutive rate cuts by the Fed before the end of 2019 may lead to an increase in the price of bitcoin to $ 14,000.
This conclusion was made based on the dynamics of BTC prices between the June and July meetings of the FOMC this year. It was at the July meeting that the Fed decided to lower interest rates by a quarter point (25 bp), making the first rate cut in 11 years.
Between the June and July meetings, the price of BTC against the US dollar increased by 12%, which was used in the forecast.
At the same time, there are factors that can lead to hindering the appreciation of the main cryptocurrency .
For example, the DXY index shows that over the past few months, the US dollar has shown good results, which will complicate the movement of BTC up to the above values.
On the other hand, factors such as Brexit and the ongoing trade war between the US and China, combined with lower rates, can increase the attractiveness of bitcoin as a means of hedging inflationary risks.
Publication date 08/27/2019
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