Coinspeaker
Bitcoin (BTC) Price Teases $38K Again as Fed Members Publicly Disagree on Economic Outlook
The Bitcoin (BTC) narrative as a global reserve currency is fast catching up with poor monetary policies around the world. In the past 24 hours, Bitcoin price edged 2.2 percent higher to revisit this year’s all-time high of around $38,377. More institutional investors in the United States are pushing for the approval of spot Bitcoin exchange-traded funds (ETF) despite the regulatory hurdles. On Tuesday, the United States Securities and Exchange Commission (SEC) opted to delay the Bitcoin spot ETF application by the $1.5 trillion fund manager, Franklin Templeton Investments Inc (NYSE: BEN). Nonetheless, the fund manager was not dismayed by the decision and opted to submit an updated proposal for a spot Bitcoin ETF before the end of the day.
Bitcoin Flourishes on Fed Members’ Uncertainty on Monetary Policy
Bitcoin price is likely to close the year trading above $40,000 purely fueled by the recent events in the United States. Notably, the United States has accelerated its crackdown on crypto-related companies – as shown by Binance Holdings Ltd, Kraken, and Bybit- in a bid to tame the high inflation. However, their desperate actions seem to be publicizing Bitcoin and digital assets to more investors. Furthermore, Bitcoin’s trading volume has significantly increased in the recent past with on-chain data showing that the supply on centralized exchanges has declined to the lowest level since 2017.
On Tuesday, three Fed members – Chicago President Austan Goolsbee, Governor Christopher Waller, and Governor Michelle Bowman – spoke on the issue of monetary policies meant to tame the high inflation. From their comments, it was evident that the Fed is divided on how to game the high inflation, whether to lower, hike, or flatten the interest rates. “While I am encouraged by the early signs of moderating economic activity in the fourth quarter based on the data in hand, inflation is still too high, and it is too early to say whether the slowing we are seeing will be sustained. But I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2 percent,” Waller noted.
Notably, Waller highlighted that the Fed could soon start lowering interest rates if the inflation continues to ease over the next three to five months. A different opinion was expressed by Bowman on Tuesday on how to tame the high-interest rates. According to Bowman, the Fed needs to continue with interest rate hikes in the coming months in order to tame the high inflation. While on it, Wall Street analysts expect the Fed to hold the lending rate at a range between 5.25 and 5.50 percent.
“My baseline economic outlook continues to expect that we will need to increase the federal funds rate further to keep policy sufficiently restrictive to bring inflation down to our 2 percent target in a timely way,” Bowman said.
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Bitcoin (BTC) Price Teases $38K Again as Fed Members Publicly Disagree on Economic Outlook