According to Fundstrat founder Thomas Lee, Bitcoin ‘transcends’ fiat monetary policy given that its price didn’t react to the rate cut news. However, he does believe that this U-turn could do wonders for Bitcoin in the long-term.
The Federal Reserve cut rates for the first time in ten years, meaning that Bitcoin experienced the first major shift in its monetary policy during its entire existence.
Bitcoin stands strong
The Dow had its worst day since May, slipping 330 points as the direct aftermath of the rate cut. Meanwhile, Bitcoin is currently sitting at $10,000, showing no signs of incrementing volatility.
Speaking of the long-term picture, Lee recently told Fox Business that lower rates would push more money into the likes of Bitcoin.
Bitcoin’s becoming increasingly a macrohedge for investors against things that could go wrong. Rate cuts are adding liquidity. Liquidity is pushing money into all these risk assets and also hedges, which is helping Bitcoin.
Lower rates result in more borrowing/spending and a higher level of inflation, which is undeniably bullish for Bitcoin, the asset that is primarily valued because of its scarcity.
Reaching new highs
Lee doubled down on his earlier prediction that the Bitcoin price would reclaim its ATH of $20,000 as soon as this year.
We don’t have a target for Bitcoin, but the prior high was $20,000. I think there’s a good possibility that Bitcoin reattains that high this year.
The prescient analyst was among the first Bitcoin bulls to call the end of crypto winter.