Bitcoin and Other Risk Assets Defy Low Fed Rate Cut Expectations, Analyst Says

According to CoinDesk: Despite tempered expectations for a cut in the Fed rate, risk assets like Bitcoin are demonstrating resilience, says one analyst. Bitcoin has managed to recover from moderate losses sustained in the aftermath of a higher-than-expected U.S. inflation report, which diminished optimism for a potential Federal Reserve rate reduction. The cryptocurrency went from $50,000 to approximately $48,800 following the release of the January U.S. consumer price index report, but it has since made a comeback and stabilized around $49,500 during the start of the Asian business day. "Even though the vast majority of market participants don’t expect a March rate cut, in general, risk assets are behaving as if it were still likely," stated Oliver Rust, Head of Product at Truflation. Expectations for any rate cuts may have to wait until May or June unless there are indications of a softening economy, Rust added. Markets might have accepted that higher-for-longer interest rates are the reality and are learning to operate in this new environment. Notably, a Polymarket contract indicates a 59% possibility that Bitcoin will hit a record high in 2024, while another assigns a 66% chance that Bitcoin will reach its all-time high before Ethereum does.