Tumbling dollar and hope for a Fed reduction push Bitcoin higher

You’d almost forget that it’s September, with Oracle suddenly making Larry Ellison the richest man in the world, and the falling dollar driving Bitcoin higher. While everyone was bracing for a drop to $100,000 at the beginning of the month, the largest digital currency is steadily rising and is already trading at $115,000 again. If the Fed does indeed lower US interest rates next week, a positive month of September is quite possible.

Federal Reserve

It looks like US President Donald Trump will finally get his wish granted next week and see interest rates get cut by 25p. At least, that’s what most analysts are currently assuming. Given that the US labor market is clearly losing steam and inflation appears to be under control, it makes sense that Fed Chairman Jay Powell would announce a cut next week. Lower interest rates are good for risky investments like tech stocks and cryptocurrencies. So that 25p cut (and a hint of a future cut) would indeed boost Bitcoin.

Dollar

The dollar is also helping Bitcoin. The biggest currency in the world, the so-called greenback is currently trading between 1.17 and 1.18 against the euro. Dollar-denominated commodities, such as Bitcoin, naturally benefit from this weakness. When the DXY (dollar index) falls, Bitcoin rises. When the DXY rises, Bitcoin falls. This year, the dollar has provided a considerable stimulus for Bitcoin already. Beware of a possible turnaround though.