Bitcoin buoyant as interest rates continue to decline

Merkle Capital, a crypto investment advisory, expects rising Bitcoin prices and increased cryptocurrency investments this month because of the global trend of falling interest rates.
Woramet Chansen, investment advisor at Merkle Capital, said Bitcoin prices rose by more than 25% in September after the US Federal Reserve cut rates for the first time in four years by 0.50 percentage points.
“That was a key turning point in the market cycle, encouraging investors to take more risks and presenting an opportunity for long-term digital asset investment,” he said.
“Although the price of Bitcoin reached an all-time high, other cryptocurrencies have not been able to record the same lofty peaks.”
In Mr Woramet’s view, Bitcoin and other cryptocurrencies, especially Ethereum, are likely to grow significantly this month given the Fed’s dot plot in September.
The dot plot suggested 2.5 percentage points of total interest rate cuts by the end of 2026, including the reduction last month. This would reduce the fed funds rate target range to 2.75-3.00% in 2026.
“This indicates a good opportunity looking forward for risk assets based on fundamentals and statistics,” he said.
Meanwhile, stablecoin supply is at its highest level in two years, indicating the value of cash in the crypto market.
“The stablecoin supply being at an all-time high is an important example of the increasing confidence of investors,” said Mr Woramet.
The market cap of altcoins, excluding Bitcoin and Ethereum, has increased by more than 25%, passing an important test level over the past six months, said the investment firm. This indicates investor confidence in the crypto market, especially the Ethereum ecosystem, which led gains of other currencies, he said.
Mana Khanijou, chief commercial officer at Merkle Capital, said a risk factor is the escalation of geopolitical conflicts.
“If that happens, it may cause panic selling of various assets, reversing the current economic recovery direction,” said Mr Mana.
However, the short- to medium-term prospects are positive for crypto investment, he said.
Sukit Udomsirikul, managing director and head of research at InnovestX Securities, said after passing the halving period, the Bitcoin price is in a range of US$50,000-55,000.
This is a reasonable price based on demand and supply data, he said. But the weak US dollar and lower interest rates are factors supporting the Bitcoin price.
One factor to monitor is the US presidential election in early November, said Mr Sukit.
“If Donald Trump wins, we have to monitor any policies to promote cryptocurrencies,” he said.
Bitcoin and Ethereum are considered alternative assets for investment because investors buy them through spot exchange-traded funds, said Mr Sukit.