Crypto finance company BIT (formerly Matrixport) assessed that a potential weakening of the US dollar and expectations of interest rate cuts could support both Bitcoin and gold prices.
The analysis published by the company stated that macroeconomic conditions could simultaneously have a positive impact on both risky assets and gold, which is seen as a safe haven.
According to BIT’s assessment, technical indicators suggest that gold prices may have entered a process of forming a significant bottom. Analysts state that the precious metal may be preparing for a new uptrend after its recent volatility. It is also predicted that Bitcoin could receive support from similar macroeconomic dynamics during the same period.
The company emphasized that while market expectations suggest the US Federal Reserve (Fed) will raise interest rates approximately twice this year, this scenario is not certain. According to BIT, if economic data presents a different picture, it’s also possible the Fed won’t raise interest rates at all this year. In such a case, the US dollar could depreciate, and expectations of interest rate cuts could strengthen in the markets.
The analysis notes that a weakening dollar has traditionally been a key factor supporting gold prices, and states that Bitcoin has also shown sensitivity to similar macroeconomic developments in recent years. In particular, it points out that increased global liquidity and expectations of falling interest rates could lead investors to alternative assets.
Market experts believe that a low interest rate environment could increase the attractiveness of both gold and Bitcoin. Falling interest rates reduce the cost of holding non-yielding assets, encouraging investors to turn to such assets as a hedge against inflation.
However, analysts point out that expectations regarding monetary policy can change rapidly in line with economic data. Inflation, employment, and growth figures, in particular, will continue to be decisive in determining the Fed’s future actions.
*This is not investment advice.