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Bitcoin Recovers After Biden’s Optimistic Rate Cut Remarks
Following a recent spike in inflation numbers, U.S. President Joe Biden expressed confidence in the potential for a rate cut later this year. The latest Consumer Price Index (CPI) report revealed a sustained 3.5% inflation rate in March, prompting Biden to anticipate a rate cut before the year’s end. Speaking at a press conference in Japan, Biden stated, “I do stand by my prediction that before the year is out, there’ll be a rate cut. This may delay it a month or so, I’m not sure of that.” He further emphasized, “We don’t know what the Fed is going to do for certain, but look, we have dramatically reduced inflation from 9% down to close to 3%.”
According to data from CoinGecko, the price of Bitcoin currently sits around $70,800, marking a 2.5% increase following a brief dip post the CPI report release. The broader cryptocurrency market mirrored this upward trend, with the total market cap of all cryptocurrencies surging 2.3% to reach $2.77 trillion. Notably, the top 10 cryptocurrencies (excluding stablecoins) all posted gains over the last 24 hours. Ethereum, as the second-largest cryptocurrency, experienced a 1.9% increase, trading just below $3,600.
Despite lingering high inflation rates, the U.S. Federal Reserve remains cautious about lowering federal interest rates. This conservative approach often prompts investors to seek refuge in traditional safe-haven assets like treasury bonds, rather than venturing into more volatile options such as cryptocurrencies and stocks.
Recent market activity also witnessed a shift in Bitcoin ETF flows, with $123.7 million flowing into exchange-traded products. Notably, Grayscale’s GBTC reported its lowest outflow day, with only $17.5 million leaving the fund. CEO Michael Sonnenshein of Grayscale mentioned that outflows from GBTC were approaching a state of “equilibrium,” signaling potential stability in the flow of funds.
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