Bitcoin hits $12k earlier this week, a year-to-date high driven by daunted bond yields and worries over the impact of coronavirus outbreak on the worldwide economy.
Over 64% rally this year made Bitcoin one among the world’s profitable assets, reflecting concerns among investors over the Federal Reserve’s commitment of keeping interest rates lower near zero, along with the impact of trillions of dollars of aid from the United States government .
Push Bitcoin Even Higher
Additionally, the very dovish factors that helped to push Bitcoin [BTC] higher earlier this year expect to increase their stay. A CNBC report published Wednesday highlighted the Fed’s got to tolerate its inflation target of around 2% within the upcoming years, with some analysts pointing to levels even beyond the said threshold.
The forward guidance could hit the cable by as soon as September. it might take cues from the Fed’s chairman Jerome Powell’s last week’s statement. He added that the committee would enforce its present policy framework for as max as a year.
In line with the head of worldwide policy and central bank strategy at Evercore ISI, Krishna Guha, Powell’s office would seem more dovish than the Janet Yellen’s one, who kept rates near zero for as max as 6 years after the great Depression. That provides investors an extended time to restructure their portfolios to favor anti-inflation assets like gold and Bitcoin.
Growing Accumulation For Safe-Havens
The latest data shows a growing accumulation for safe-havens. Investors moved a complete of $7.4 Bln of money into gold-backed ETFs earlier in July, consistent with data fetched by the World Gold Council. That was atop the $40 Bln they invested during the primary half of this year.
Meanwhile, Bitcoin futures listed on the Chicago Mercantile Exchange reported a rise in their open interest and volume earlier in the week. They hit a one-year high above $700 Mln.
While on the other hand, the assets under management [AUM] of the Grayscale Bitcoin Trust also reached its all-time high. It happened following the firm’s accumulation of $5.1 Bln worth of Bitcoin [BTC]. In its latest financial report, it stated that inflows into their crypto-investment products has crossed $1 Bln within the primary half of this year.
It is “demonstrating sustained demand for digital asset exposure despite a backdrop characterized by economic uncertainty,” read the Grayscale report.
Ronnie Moas, the founder of Standpoint Research, sees the continued trend as a catalyst that would propel Bitcoin price above its all-time high of $20k.
While some analyst even expects that the BTC/USD is expected to hit as high as $28k by the next year.