The Bitcoin (BTC) price has reached an 18-month high, with its price climbing to $38,707 after recording a 2.5% gain.
This recent spike in the cryptocurrency's value is attributed to several key factors, including the optimistic views of influential investors and changing economic conditions.
Institutional demand is (almost) here
The flagship cryptocurrency is now up by more than 130% on the year-to-date basis. Prominent billionaire and crypto enthusiast Mike Novogratz remains bullish about Bitcoin's future. One of the main catalysts he identifies is the anticipated approval of a spot Bitcoin ETF.
He believes that if major financial institutions like BlackRock and Fidelity increase Bitcoin adoption, the cryptocurrency's price could soar significantly higher.
Novogratz's optimism is shared by many in the crypto community who see institutional adoption as a crucial step towards mainstream acceptance of Bitcoin.
Economic factors at play
Another significant factor influencing Bitcoin's rise is the shifting economic landscape, particularly in the US.
Bond investors are increasingly anticipating Federal Reserve interest rate cuts by the first half of 2024, in response to signs of slowing U.S. economic growth and easing inflation.
The Federal Reserve is expected to cut interest rates six times in 2024, as predicted by ING Economics. This forecast is based on moderating inflation, a cooling job market, and a deteriorating outlook for consumer spending.
The prospect of lower interest rates tends to enhance the appeal of non-interest-bearing assets like Bitcoin, contributing to its recent price surge.