- Bitcoin rose 3% to $71,172 in early trading, up more than 60% year to date in 2024
- The Fed is expected to cut its key interest rate target by 25 basis points in June
Bitcoin continued its recent strength, reaching a new all-time high of nearly $72,000 on Monday morning, buoyed by the market’s hopes of impending interest rate cuts from the Federal Reserve.
The world’s largest cryptocurrency was trading at $71,700 by mid-morning, up 3.1 percent for the day and more than 60 percent since the start of the year.
Bitcoin’s momentum also continues to be driven by flows into newly launched US spot Bitcoin ETFs, which have recorded cumulative flows of more than $106 billion since the start of the year.
Hopes of Fed rate cuts continue to boost Bitcoin and gold
Softer-than-expected US labor market data on Friday added to expectations that the Fed will cut interest rates in June.
According to data from CME Group, market prices currently offer a 73.9 percent chance that the Fed will cut its current interest rate target of 5.25 to 5.5 percent by 25 basis points in June to a range of 5 to 5.25 percent.
Expectations of global interest rate cuts have also helped push gold prices to record highs.
The LBMA London Gold Price rose 4.2 percent last week to $2,171.20 on Friday evening, taking its 2024 gain to 18.3 percent.
> Gold prices reach record highs: what’s behind the latest rise and how do you invest in it?
Ned Naylor-Leyland, gold and silver investment manager at Jupiter Asset Management, said: ‘Gold is always forward-looking and so has largely absorbed the Fed’s reduced outlook for rate cuts in 2024 (the bond market has three rate cuts per year at the end).
‘In addition, there are increasing expectations in the markets about the Fed’s expected transition to a looser monetary policy. That’s why we’ve been seeing the gold trend rising lately.”