BitcoinBTC has surged over $30,000 this week, topping a 2023 first quarter rally that JPMorgan thinks could have a long way to run.
The bitcoin price has almost doubled since hitting lows of just over $15,000 per bitcoin in the aftermath of the FTX implosion last year despite a looming $1 billion earthquake.
Now, bitcoin and crypto investor Michael Novogratz has said he expects the U.S. Federal Reserve to trigger a $200 billion bitcoin price boom later this year.
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The bitcoin price has exploded into 2023.
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“The clearest trades have been and will continue to be long gold, long the euro, long bitcoin, long ethereum—these assets that should do well with the Fed stopping hiking and then cutting,” Novogratz, the chief executive of bitcoin and crypto financial services company Galaxy Digital, told Bloomberg.
This week, minutes from the Fed’s March meeting suggest officials are on track to hike interest rates again next month while forecasting a “mild recession” later this year.
In early 2022, the Fed embarked on a program of interest rate hikes designed to cool inflation and began cutting its balance sheet to suck liquidity out of the system, dragging on higher-risk assets like bitcoin and technology stocks. However, the rapid hikes sparked a banking crisis last month, causing the Fed to dial back expectations of further increases and sparking a bitcoin, crypto and tech stock rally.
“Bitcoin had a huge run,” Novogratz said, pointing to the bitcoin price recovery so far this year and adding: “We can consolidate here before moving towards $40,000, as long as the Fed plays out the way I think it’s gonna play out.”
An increase in the bitcoin price to $40,000 would add around $200 billion to the cryptocurrency’s market capitalization that’s currently just under $600 billion.
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Bitcoin’s breach of $30,000 per bitcoin has been cheered by market watchers this week, with some pointing to previous times bitcoin has crossed the psychological level.
“The $30,000 mark was significant for bitcoin in 2021 and the first half of 2022, acting as a market mode switch,” Alex Kuptsikevich, FxPro senior market analyst, said in emailed comments.
“Last year, bitcoin consolidated around this price for about five weeks before plunging sharply. There is a greater chance of a mirror dynamic, with the bulls taking a long time to gather their strength before making a decisive move higher.”
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