The price of Bitcoin experienced an early weekend surge following Federal Reserve Chairman Jerome Powell’s speech on the Jackson Hole symposium. In line with the newest on-chain remark, the announcement of potential rate of interest cuts has led to a rise in Bitcoin demand prior to now day.
BTC Demand Sees Growth In The US — Impact On Price?
In a recent post on the X platform, CryptoQuant’s Head of Research Julio Moreno revealed that demand for Bitcoin has been on the rise in the USA prior to now 24 hours. This growth got here on the back of the Fed disclosing that a cycle of lower rates of interest would soon start.
Lower rates of interest by the central bank are sometimes a welcome development for dangerous assets like Bitcoin, the world’s largest cryptocurrency. Falling rates of interest are inclined to diminish the profits on traditional financial instruments equivalent to bonds, making cryptocurrencies more attractive options for investors in search of higher yields.
In line with Moreno, the BTC price premium on Coinbase — the most important cryptocurrency exchange within the US — has surged to its highest level since mid-July. For context, the Coinbase premium refers back to the difference between the coin’s value on Coinbase and other global centralized exchanges.
Chart showing BTC's Coinbase premium index | Source: jjcmoreno/X
Typically, when the BTC price premium on Coinbase is rising, it implies that there may be increasing demand from US investors, as they’re willing to spend more to accumulate Bitcoin. As earlier explained, this heightened demand is sensible given the likelihood of rate of interest cuts and fewer profitable traditional financial instruments.
Increasing demand is a very good sign for the value of Bitcoin, because it suggests that investors are positioning themselves to reap from a promising crypto future. At the identical time, the growing demand and the rising price premium could lead to elevated market volatility.
Moreover, the increasing US Bitcoin demand comes just at the fitting time, as demand growth has remained at low levels over the past few weeks. CryptoQuant observed in a report that BTC’s apparent demand has been sluggish since April 2024 when the coin’s price was around $70,000.
In line with the blockchain intelligence firm, the apparent demand must see some growth for BTC’s price to see some daylight. Ultimately, if the growing demand in the USA is sustained and spread to other markets, investors could see the flagship cryptocurrency return to around its all-time high.
Bitcoin Price At A Glance
As of this writing, the price of BTC is hovering around $64,000, reflecting an over 5% increase prior to now day. In line with data from CoinGecko, the premier cryptocurrency is up by 7.5% prior to now week.
The value of BTC on the each day timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView