For the very first time in a week, Bitcoin price momentarily rose above $41,000, breaking out of its previous restricted trading session as risk assets recovered all around the globe. The most valuable cryptocurrency market in the world rose as high as 5.5% to $41,000 in morning New York trade before trimming its gains. This year, it has dropped by around 13%. Another boost was given to other coins like Ether and Solana. A vow by Beijing to implement initiatives to bolster the financial sector boosted Chinese shares, which surged.
Reasons behind Bitcoin Price Increase
Millionaire cryptocurrency entrepreneur Michael Novogratz, who leads Galaxy Digital Holdings Ltd., stated Monday during a TV appearance on Bloomberg Crypto that a prolonged gain is unlikely as the Federal Reserve continues to tighten. A rise in interest rates is expected to keep the price of Bitcoin between $30,000 and $50,000, he added.
FED Interest Rates and Bitcoin Price
Long-term investors jumping in to purchase when the Bitcoin price drops has been blamed by some market analysts for keeping Bitcoin stuck in its narrowest trading session until October 2020. It has also been hindered by short-term investors who have sold off Bitcoin as well as other cryptos. Traders are watching closely to see how aggressively the Fed plans to combat the highest level of inflation in four decades. At the end of its two-day policy meeting. The Federal Banking Committee is almost expected to increase the rate by a quarter point.
Should You buy Bitcoin?
If you’re looking for short-term gains, bitcoin is an excellent investment. There could also be a protracted benefit to investing in digital currency. Inflationary pressures will be reduced. The value of your bitcoins might go down as well as up at any time. Bitcoin is a risky investment because of its volatility.