bitcoin price experienced a surge at the beginning of the weekend following Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium. According to the latest on-chain observation, the announcement of possible interest rate cuts has led to a surge in demand for bitcoin over the past day.
btc Demand Grows in the US: Impact on Price?
In a recent post on the x platform, CryptoQuant's head of research, Julio Moreno x.com/jjcmoreno/status/1827074576565567882″ target=”_blank” rel=”noopener nofollow”>revealed Demand for bitcoin has increased in the United States over the past 24 hours. This growth came after the Federal Reserve revealed that a cycle of lower interest rates would soon begin.
Lower interest rates by central banks are usually good news for risk assets like bitcoin, the world’s largest cryptocurrency. Falling interest rates tend to reduce the gains of traditional financial instruments like bonds, making cryptocurrencies more attractive options for investors seeking higher returns.
According to Moreno, the btc price premium on Coinbase (the largest cryptocurrency exchange in the United States) has risen to its highest level since mid-July. To put it in context, the Coinbase premium refers to the difference between the value of the coin on Coinbase and on other global centralized exchanges.
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Chart showing btc's Coinbase premium index | Source: x.com/jjcmoreno/status/1827074576565567882" target="_blank" rel="noopener nofollow">jjcmoreno/x
Typically, when the btc price premium on Coinbase increases, it implies that there is increasing demand from US investors as they are willing to spend more to acquire bitcoin. As explained above, this increased demand makes sense given the likelihood of interest rate cuts and less profitable traditional financial instruments.
The increased demand is a particularly good sign for the bitcoin price, as it suggests that investors are positioning themselves to take advantage of a promising future for cryptocurrencies. At the same time, the growing demand and rising price premium could lead to elevated volatility in the market.
Furthermore, the growing demand for bitcoin in the United States comes at just the right time, as demand growth has remained at low levels over the past few weeks. CryptoQuant crypto-weekly-report” target=”_blank” rel=”noopener nofollow”>observed in a report that apparent demand for btc has been sluggish since April 2024, when the coin's price was around $70,000.
According to the blockchain intelligence firm, apparent demand needs to see some growth for btc’s price to see any light. Ultimately, if the growing demand in the United States sustains and spreads to other markets, investors could see the flagship cryptocurrency return to its all-time high.
bitcoin price at a glance
At the time of writing, btc is trading at around $64,000, reflecting an increase of over 5% over the past day. According to data from CoinGecko, the leading cryptocurrency is up 7.5% over the past week.
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The price of btc on the daily timeframe | Source: BTCUSDT chart on x/2f6ZeuyR/" target="_blank" rel="noopener nofollow">TradingView
Featured image from iStock, chart from TradingView
