Over the Easter long weekend, Bitcoin (BTC-USD) rallied decisively to over $30,000. On Monday evening, Bitcoin rose by as much as 7%. It settled today at around $30,205. The strength of BTC and Ethereum (ETC-USD) defies skeptics who dismiss cryptocurrency as a scam.
In 2022, cryptocurrency platforms that operated in a Ponzi style did not survive. This year, the strongest platforms and crypto will perform the best. What is really driving Bitcoin’s run-up to $30,000?
Investors in crypto and stock markets are watching the U.S. consumer price index report. The Federal Reserve is watching this data closely. Combined with the strong jobs report, persistently high inflation will keep the Fed Funds rate at elevated levels.
Stock markets continue to hope for a pivot. An interest rate cut would decrease the attractiveness of money market funds that pay almost 5% in interest. This increases the potential return from speculative stock markets. By extension, Bitcoin becomes more appealing.
Risks
Bitcoin holders do not know if “big whales” are causing prices to rise. Those who hold outsized positions in a market where transactions are falling will influence Bitcoin prices. Individual investors should keep that in mind before chasing BTC at current levels.
