The Bitcoin price plunged to $65,000 yesterday and has now risen slightly to $66,000. That plunge started yesterday after the American stock market suddenly started to plunge yesterday. Tech shares in the United States in particular are having a hard time.
For example, Apple fell by 4.2 percent and Amazon and Meta both lost more than 2 percent.
New chairman of the US central bank good for Bitcoin, right?
When Donald Trump announced that he would nominate Kevin Warsh as the new chairman of the US central bank, interest rates shot up and gold and Bitcoin fell. Previously, Warsh was known as someone who was extremely strict when it came to inflation.
The immediate expectation was that a central bank under Warsh would provide no support for the financial markets at all. However, according to Evercore’s Krishna Guha, we need to massively adjust our expectations regarding Warsh.
He saw Warsh repeatedly point to artificial intelligence and the enormous productivity gains that the technology can theoretically deliver. Guha thinks Warsh believes the rise of artificial intelligence is a natural counterbalance to inflation.
The reasoning: if AI means that robots will soon be able to produce enormous amounts and cheaply for us, then interest rate cuts and a stimulating central bank can bring that future to us sooner.
You then end up in a situation where interest rate cuts would strangely result in lower inflation. To achieve this, AI just needs to be the productivity miracle that Silicon Valley promises us.
The most important thing for now, however, is that it appears as if the market is changing a bit about Kevin Warsh. It is expected that he will be less strict than expected, and that is in principle positive for Bitcoin.
Important economic figures on the calendar
In the context of the US central bank and interest rate cuts, important figures are again scheduled for today. It is time for a new consumer price index (CPI) from the United States.
We recently saw market expectations regarding inflation rise, which makes it extra interesting to see how the CPI comes in this afternoon. For investors hoping for interest rate cuts, it would be positive if inflation turns out to be lower than expected. This gives the central bank extra room to lower interest rates.
For the time being, inflation, which is still slightly higher than desired, continues to act as a brake on interest rate cuts.
Source: https://newsbit.nl/crypto-wekker-bitcoin-koers-opnieuw-onderuit-na-crash-amerikaanse-beurs/
