Bitcoin saw a surge in price over the weekend following Federal Reserve Chairman Jerome Powell’s remarks at the Jackson Hole symposium. The announcement of potential interest rate cuts has sparked increased demand for Bitcoin, as indicated by recent on-chain observations.
Increasing Demand for BTC in the US and Its Price Impact
Reports from CryptoQuant’s Head of Research Julio Moreno unveiled a rise in Bitcoin demand in the United States in the last 24 hours. The disclosure of an upcoming cycle of lower interest rates by the Fed has propelled this growth.
Lower interest rates set by central banks often favor risky assets like Bitcoin, the leading cryptocurrency globally. With falling interest rates reducing profits on traditional financial instruments such as bonds, cryptocurrencies become more appealing to investors seeking higher yields.
The BTC price premium on Coinbase, the largest US cryptocurrency exchange, has reached its highest level since mid-July, according to Moreno. This premium signifies the variance in Bitcoin’s value on Coinbase compared to other major global exchanges.
Rising Bitcoin price premium on Coinbase indicates escalating demand from US investors willing to pay more to acquire Bitcoin. This surge in demand aligns with expectations of interest rate cuts and less profitable traditional financial instruments.
Increasing demand signals positive prospects for Bitcoin’s price, indicating investors are positioning for a promising future in cryptocurrency. However, the growing demand and rising price premium may lead to heightened market volatility.
The recent surge in US Bitcoin demand comes at an opportune time given the low levels of demand growth in recent weeks. Since April 2024, when Bitcoin’s price was around $70,000, CryptoQuant noticed a sluggish apparent demand for BTC.
For BTC’s price to experience improvement, the apparent demand must witness growth. Sustained growth of demand in the US and expansion to other markets could potentially drive the flagship cryptocurrency back to its previous all-time high levels.
Bitcoin Price Overview
Presently, Bitcoin’s price hovers around $64,000, showcasing a over 5% increase in the last day. Data from CoinGecko reveals the primary cryptocurrency has surged by 7.5% over the past week.
