TL;DR
- The price of Bitcoin has recently risen above $52,000, with several factors suggesting there will be even more growth in the near future.
- Changes in U.S. interest rates may also impact the valuation of the asset.
Bitcoin (BTC) has been on a massive uptrend in recent weeks, with its price climbing over 25% monthly and breaking $52,500 for the first time in over two years. In the following lines, we will outline some key metrics and upcoming events that suggest the rally is far from over.
According to CryptoQuant, outflows from Bitcoin exchanges have increased recently. show that investors have shifted to self-custody methods rather than relying on centralized platforms. The trend is considered bullish because it reduces immediate selling pressure.
BTC exchange outflow, source: CryptoQuant
Another factor that could play a role in a further BTC price increase is the halving (scheduled for April this year). The event will halve the asset's pre-programmed inflation as block rewards for miners will drop to 3,125 BTC instead of the current figure of 6.25 BTC.
Historically, halvings have acted as a catalyst for future price increases as they reduce the number of new BTC being created. So if demand stays the same or increases, the price should increase. Remember that the asset reached its all-time high price of nearly $70,000 in November 2021, a year and a half after the previous such event.
Those interested in learning more about the upcoming halving can watch our special video below:
Last but not least, the price of the cryptocurrency could benefit from a possible change in the US Federal Reserve's anti-inflation policy. The central bank raised interest rates 11 times between March 2022 and July 2023 to combat runaway inflation caused by the COVID-19 pandemic, subsequent mass money printing and ongoing global conflicts, among other measures.
However, the Fed left the benchmark untouched during its recent FOMC meetings and hinted at rate cuts throughout 2024.
High interest rates make borrowing more expensive and could affect people's interest in riskier assets like cryptocurrencies. On the other hand, lowering the benchmark could allow more individuals and companies to deal with risky assets by securing debt financing. A survey conducted in 2022 estimated that 21% of participants took out loans to invest in crypto.
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