Analysts Predict Demand for Bitcoin Will Continue to Rise: Here’s the Reason Behind It!

The U.S. Federal Reserve (Fed) kept the policy interest rate unchanged, aligning with market expectations, while the first rate cut expectation has shifted to September.

In a meeting held on Wednesday, the Fed did not make any changes to the policy interest rate. This decision aligns with both analysts' and CME FedWatch data's previous expectations. Fed Chairman Jerome Powell stated in a press conference following the meeting that inflation is under control, while emphasizing that the strong increase in employment and the resilience of consumer spending allow interest rates to remain high.

BRN analyst Valentin Fournier expressed that the slowdown in the U.S. economy has raised concerns about stagflation. Fournier stated that the Fed does not feel urgent pressure for rate cuts, and the earliest cut could occur in the September meeting. According to the CME FedWatch tool, markets are pricing in a 62% probability of a rate cut at the meeting on September 17.

According to 21Shares analyst David Hernandez, the risk of stagflation could create advantages for Bitcoin (BTC). Hernandez noted that demand for Bitcoin could increase in the uncertain environment created by a slowing economy and high unemployment. He emphasized that as central banks in different regions begin to cut interest rates, Bitcoin could attract some of this liquidity due to its unlimited and decentralized nature.

On the other hand, QCP Capital noted that due to low trading volumes and cautious options positioning over the summer, short-term upside for Bitcoin may be limited. The company also stated that month-end rebalancing activities and deleveraging could exert additional pressure on cryptocurrencies.