Crypto analyst Benjamin Cowen has issued a warning about potential damaging impacts on (BTC) and the (SPX) as a consequence of potential Federal Reserve rate of interest cuts, contradicting frequent beliefs that fee cuts result in improved efficiency for threat belongings.
Right now, Cowen drew consideration to historic patterns suggesting each BTC and the SPX might doubtless face a downward pattern following a fee lower. He referenced the interval from 2016 to 2018 when fee hikes coincided with rises in each markets.
He famous that the Bitcoin market bottomed out when the Fed paused charges in December 2018, adopted by a market peak earlier than the primary fee lower in July 2019. Cowen additionally identified comparable tendencies with the S&P 500, which skilled market peaks round occasions of fee cuts in 2000 and 2007.
Difficult typical knowledge, Cowen argued that markets usually worsen as soon as fee cuts begin. He predicts that each BTC and SPX will solely rally as soon as the Federal Reserve nears the top of its rate-cutting course of, as preliminary cuts typically fail to sufficiently stimulate a good economic system.
Regardless of Cowen’s warnings, optimistic Bitcoin worth predictions have emerged in current weeks, largely influenced by the acceptance of BTC ETF. Cathie Wooden from ARK Make investments holds a contrasting view to Cowen’s, predicting Bitcoin will surge as quickly because the Fed is required to pivot.
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