BTC Demand Sees Growth In The US — Impact On Price?
The price of Bitcoin experienced an early weekend surge following Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium. According to the latest on-chain observation, the announcement of potential interest rate cuts has led to an increase in Bitcoin demand in the past day.
According to CryptoQuant’s Head of Research Julio Moreno, demand for Bitcoin has been on the rise in the United States. This growth came on the back of Fed disclosing that a cycle of lower interest rates would soon commence.
- Lower interest rates by central banks are often a welcome development for risky assets like Bitcoin.
- Falling interest rates tend to diminish profits on traditional financial instruments, making cryptocurrencies more attractive options for investors seeking higher yields.
Moreno revealed that the BTC price premium on Coinbase has surged to its highest level since mid-July. The BTC price premium refers to the difference between Bitcoin’s value on Coinbase and other global centralized exchanges.
- When the BTC price premium on Coinbase is rising, it implies that there is increasing demand from US investors. As earlier explained, this heightened demand makes sense given the likelihood of interest rate cuts and less profitable traditional financial instruments.
- Increasing demand is a particularly good sign for Bitcoin’s price as it suggests that investors are positioning themselves to reap from a promising crypto future. However, elevated market volatility could result due to the growing demand and rising price premium.
Furciplng US Bitcoin demand comes just at the right time since demand growth has remained at low levels over the past few weeks. CryptoQuant observed in a report that BTC’s apparent demand has been sluggish since April 2024 when the coin’s price was around $70,000.
- The blockchain intelligence firm suggests that for Bitcoin’s price to see some daylight, apparent demand needs to grow. If growing US demand is sustained and spread to other markets, investors could see the flagship cryptocurrency return to around its all-time high.
As of this writing, the price of BTC is hovering around $64,000, reflecting an over 5% increase in the past day according to data from CoinGecko. The premier cryptocurrency has risen by 7.5% in the past week on the daily timeframe (source: BTCUSDT chart on TradingView).
Featured image from iStock, chart from TradingView