US BTC Demand Spikes as Fed Signals Rate Cuts: CryptoQuant 

Bitcoin CryptoQuant Federal Reserve
The recent surge in Bitcoin price was largely driven by a spike in demand from U.S. investors, per CryptoQuant report.
Last updated:
Journalist
Journalist
Tanzeel Akhtar
About Author

Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk and Bitcoin Magazine.

Last updated:
Why Trust Cryptonews
With over a decade of crypto coverage, Cryptonews delivers authoritative insights you can rely on. Our veteran team of journalists and analysts combines in-depth market knowledge with hands-on testing of blockchain technologies. We maintain strict editorial standards, ensuring factual accuracy and impartial reporting on both established cryptocurrencies and emerging projects. Our longstanding presence in the industry and commitment to quality journalism make Cryptonews a trusted source in the dynamic world of digital assets. Read more about Cryptonews

Bitcoin price spiked by over 6% experiencing a surge last Friday following remarks from Federal Reserve Chairman Jerome Powell, signalling that a phase of lower interest rates could be on the horizon, reports CryptoQuant in its weekly report.

Bitcoin hit $65,000, its highest level since August 2. This rally coincided with a decrease in the yields of U.S. government bonds, which fell to their lowest level since March 2023, further fueling the market’s enthusiasm.

Bitcoin Is Flowing Back Into Coinbase

The recent price surge was largely driven by a spike in demand from U.S. investors. CryptoQuant reports this is evidenced by the Bitcoin price premium on Coinbase, a leading cryptocurrency exchange, which rose to its highest point since July.

This premium indicates that U.S. investors are willing to pay more for Bitcoin than the global average, reflecting a strong local demand.

Additionally, Bitcoin is now flowing back into Coinbase from exchanges outside the U.S., a trend historically linked with rising prices. This movement suggests that U.S. investors are increasingly dominant in the market, seeking to capitalize on the potential benefits of a more accommodative monetary policy.

Fed Committing to Slashing Its Policy Rate Is Justified

Bitmex co-founder Arthur Hayes writes in a blog post that the initial positive market reaction concerning the Fed finally committing to cutting its policy rate is justified because investors believe that if money is cheaper, assets priced in fiat dollars of fixed supply should rise.

“We are forgetting that these future anticipated rate cuts by the Fed, BOE, and ECB reduce the interest rate differential between these currencies and the yen. The danger of the yen carry trade unwind will reappear and could derail the party unless “real food” in the form of central bank balance sheet expansion, aka money printing, raises the quantity of money,” writes Hayes.

Powell delivered the pivot at roughly 9 a.m. GMT-6, which corresponds to the red oval. Risky assets represented by the S&P 500 Index (white), gold (gold), and Bitcoin (green) all rose as the price of money declined. The dollar, which is not shown here, also ended the week weaker as well.” —
Arthur Hayes from Crypto Trader Digest

Perpetual Futures Market Sees a Significant Uptick

The demand surge wasn’t confined to spot markets. The perpetual futures market also saw a significant uptick, with Total Open Interest—representing the total number of outstanding derivative contracts—increasing by almost 10,000 Bitcoin since Powell’s announcement, reports CryptoQuant.

This brings the Total Open Interest to 276,000 Bitcoin, highlighting the growing interest in leveraging futures contracts as part of the investment strategy.

Source: Coinglass

CryptoQuant reports that despite these positive signals, the broader picture of Bitcoin demand remains less encouraging. Overall demand growth has been sluggish and has even turned negative in recent weeks.

This trend contrasts sharply with the situation earlier in the year; in early April, when Bitcoin was trading at $70,000, apparent demand was much stronger.

The current demand levels suggest that while U.S. investors are driving short-term price movements, a more sustained and widespread increase in demand is necessary for Bitcoin to recover fully and achieve new highs.

Price Analysis
Bitcoin Price Hits All-Time High of $84,000 – How Quickly Can BTC Get to $100,000?
2024-11-11 16:00:29
,
by Arslan Butt
Bitcoin News
BREAKING: Billionaire Michael Saylor’s MicroStrategy Acquires 27,200 BTC Worth $2.03 Billion
2024-11-11 13:49:26
,
by Ruholamin Haqshanas
Industry Talk
Best Crypto to Buy Now November 11 – Dogecoin, PNUT, dogwifhat
2024-11-11 20:01:01
,
by Hassan Shittu

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

More Articles

Price Analysis
Bitcoin Price Rockets Past $89,000 – Can BTC Reach $100,000 This Week?
Arslan Butt
Arslan Butt
2024-11-12 10:11:32
Altcoin News
Tether Launches Wallet Development Kit for Non-Custodial Wallet Integration
Sujha Sundararajan
Sujha Sundararajan
2024-11-12 10:03:49
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors