Bitcoin’s value is predicted to decline further despite the Federal Reserve’s decision to slash interest rates, say analysts. This is due to the growing economic uncertainty brought on by the ongoing COVID-19 pandemic. Despite traditionally being viewed as a safe haven asset, Bitcoin’s value has recently been mirroring the volatile trends of mainstream markets, rather than acting independently as it has in the past.
The Federal Reserve’s move to cut rates was designed to stimulate economic growth by making borrowing more attractive. However, the ongoing pandemic has led to widespread market instability, causing investors to opt for holding cash over investing. This shift in investor behaviour is impacting Bitcoin’s value, as potential investors are becoming wary of its volatility in the current economic climate.
In conclusion, while Bitcoin has often been seen as a reliable asset in times of financial uncertainty, its current correlation with mainstream markets suggests otherwise. The pandemic’s impact on investor behaviour and the global economy will likely continue to affect Bitcoin’s value. Although the Federal Reserve’s rate cuts would traditionally stimulate investment, the present economic circumstances are causing investors to be cautious, leading to predictions of a further decrease in Bitcoin’s value.
