Traders Anticipate Bitcoin Surge as China and Federal Reserve Stimulate Economic Optimism

Traders are buzzing with excitement as they expect Bitcoin to make a significant jump as we approach the end of 2024. The recent moves from China and the Federal Reserve are driving this optimism.

October is here, and it marks a time that’s usually good for cryptocurrencies. Over the past decade, Bitcoin has surged about 90% in the fourth quarter, according to analysts at CoinMarketCap. That’s a pretty impressive track record!

On Deribit, traders are focusing on options that will pay out if Bitcoin hits $100,000 by December 27. This indicates that many believe a new all-time high is on the horizon.

Let’s talk about China. Last week, Beijing rolled out a series of initiatives aimed at boosting the economy. Analysts Brickell and Mill noted that these measures could “unleash a tsunami of liquidity.” They include a plan to issue $284 billion in bonds and a cut to the reserve requirement for banks by 0.5%.

As a result, Bitcoin’s price jumped 5%, reaching $66,300, the highest it’s been since July. However, it has since pulled back to around $63,000. BitMEX co-founder Arthur Hayes believes this is just the beginning. He suggests that the real impact will come when President Xi Jinping directs banks to issue more credit.

Now, let’s consider the Federal Reserve. Jerome Powell is set to speak at the National Association of Business Economics on Tuesday. Crypto investors will be watching closely for any hints about potential interest rate cuts. The latest U.S. employment data, due Friday, will also be closely examined.

Lower interest rates typically mean more money for people to invest. This often leads to a greater appetite for riskier assets like cryptocurrencies. Since the Fed announced a 0.5% rate cut in mid-September, Bitcoin has risen nearly 10%.

Brickell and Mill remind us not to go against the Fed or China. Doing both at once is a risky move. According to the CME Group’s FedWatch tool, there’s a 60% chance the Fed will cut rates by another 0.5% on November 7, along with a 40% chance of a 0.25% cut.