Even the deaf sultan heard that Trump wants to lower interest rates, but the FED pretends not to notice :)), meaning that his demand for a looser monetary policy could have significant effects on both gold and cryptocurrency markets. Let's evaluate this with the current global economic indicators:
📉 1. The General Meaning of Interest Rate Cuts
When interest rates fall, the dollar becomes less profitable → this means a weakening of the dollar.
Investors turn to alternative investment instruments: such as gold, Bitcoin, and other cryptos.
🌍 2. Current Global Economic Conditions
Inflation: Still above targets in many developed countries.
Recession risk: Low growth in the US and Europe, with signs of recession in some countries.
Geopolitical tensions (Ukraine-Russia, Middle East): Reducing risk appetite, increasing the search for safe havens.
🪙 3. The Impact on Cryptocurrencies
Increased liquidity → As more money enters the market, interest in cryptos rises.
Especially since Bitcoin is perceived as a kind of 'digital gold', it becomes attractive as a safe haven.
Interest rate cuts increase interest in risky assets → altcoin markets also revive.
However, regulations continue to be a significant risk factor.
🪙📈 Effects on Bitcoin
Low interest rates and a weak dollar environment → Pushes BTC prices up.
If the FED also opts for interest rate cuts, it is likely that BTC will enter a new bull cycle.
🟡 Effects on Gold
As interest rates fall, bond yields decrease → the opportunity cost of gold decreases.
Begins to attract investors due to its safe haven characteristic.
Especially while inflation is still high, gold demand increases.