FOMC

Wednesday

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<p>All the dominos are falling into place one after another. Bitcoin ETF, Halving, and now the Fed.</p>
<h2 id="h-monetary-easing-in-sight">Monetary Easing in Sight</h2>
<p>The US central bank has left its rates unchanged for the third consecutive time. Most Fed governors now expect to lower interest rates starting next year.</p>
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<p>The governors’ median projection indicates three rate cuts in 2024. This would amount to a reduction of 0.75%, bringing the federal funds rate to around 4.75%, down from the current 5.50%.</p>
<p>However, markets believe the rate cuts will come twice as fast. Futures tied to interest rates suggest a 57% chance of seeing the first rate cut in three months.</p>
<p>This would result in five rate cuts in 2024. The market even assigns a non-trivial probability of 28% in favor of six rate cuts:</p>
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     <p lang="en" dir="ltr">The December FOMC dot plot has about three rate cuts slated for 2024. The market is now pricing in over six 25 bps Fed rate cuts next year (165 bps in total). <a href="https://t.co/k1xvDUinm1" rel="noopener noreferrer nofollow">pic.twitter.com/k1xvDUinm1</a></p>— (((The Daily Shot))) (@SoberLook) <a href="https://twitter.com/SoberLook/status/1735247246608715978?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">December 14, 2023</a>
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<p><a href="https://watcher.guru/news/blackrock-fed-interest-rate-pause-a-green-light-for-investors" target="_blank" rel="noopener noreferrer nofollow">Jeffrey Rosenberg</a>, portfolio manager at BlackRock, believes that the FED’s decision not to raise interest rates on Wednesday is a <em>“green light”</em> for investors. The S&amp;P 500 closed higher yesterday. The US stock market is now a hair’s breadth from a new all-time high.</p>
<p>The Fed Chairman stated: <em>“We are close to the peak of rates, or we’ve reached it”</em>. If rates have peaked, so has the US dollar. And if the US dollar has peaked, risk assets have hit their low. And if risk assets have hit their low, so has bitcoin.</p>
<p>That being said, while bitcoin is often seen as a risk asset because of its volatility, its limited money supply capped at 21 million units actually makes it the perfect store of value.</p>
<p>The imminent Halving seems to have made this clear to giant funds like BlackRock. Its CEO Larry Fink also believes that the recent rise in bitcoin is a <em>“flight to quality.</em>”</p>
<p>ETF in January, monetary easing in March, Halving in April, new <a href="https://www.cointribune.com/en/bitcoin-now-shines-on-balance-sheets-of-american-companies/" target="_blank" rel="noopener noreferrer nofollow">accounting standards</a>? The dominos are set to fall and let bitcoin break through the $100,000 barrier in 2024.</p>
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<p>Adam Back even thinks that bitcoin’s market cap will surpass that of gold within two years. A single bitcoin could then be worth over $700,000.</p>

Bitcoin at $100,000, All Planets Align

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