Analyst: BTC may reach $100,000, but US yields need to fall below 7%

Author: Ciaran Lyons, CoinTelegraph; Compiler: Deng Tong, Golden Finance

One analyst said that only one major indicator is needed to predict whether Bitcoin can break through its all-time high of $73,700 later in 2024, and it all falls on the shoulders of the Federal Reserve.

"High yields in the United States are a good indicator, and it really needs to fall below 6% or 7% to continue to set new all-time highs." Timothy Peterson, founder and investment manager of Cane Island Alternative Advisors, pointed out. He explained that the main measure of Bitcoin price movements that he focuses on is interest rate changes.

As of this posting, U.S. high yield (a proxy for the interest rate on high-yield corporate bonds because of their higher risk of default) is 7.54%, according to YCharts.

Peterson predicts that if yields fall in the "6% or 7%" range, Bitcoin's price could reach the much-anticipated $100,000 by the fourth quarter of 2024 (or the second quarter of 2025 at the latest).

The effective yield on US High Yield Bond B is currently 7.54%. Source: YCharts

Typically, a Fed rate cut would lead to a subsequent fall in high-yield rates, and according to a recent Reuters survey, nearly two-thirds of economists surveyed predicted that this would happen in September.

Interest rates are seen as an important indicator for cryptocurrency traders because lower rates typically lead to lower yields for investors in safe-haven securities such as bonds and time deposits.

As a result, more investors are turning to riskier assets such as Bitcoin to get better returns on their investments.

As of writing, Bitcoin is trading at $61,871, down 5.08% over the past 30 days. Source: CoinMarketCap

Peterson believes that the overall market is usually "flat and volatile" during the September-October period.

"Not every time, but many times," he commented. But, With the US election approaching, ahead of the November 4 US election, he said: "There is more uncertainty going into October."

Meanwhile, cryptocurrency analyst Scott Melker, also known as "The Wolf of the Streets," declared that Fed rate cuts are not always good for assets outside of fixed income investments.

"There is a widely held theory that the Fed turning is good for the market," he said in a May 14 X post.

"Rate cuts usually precede big declines," he commented on the broader overall market.