Denmark Cuts Its Interest Rate by 0.25%, Is There a Breakout in Bitcoin?
Danish central bank Nationalbanken has cut its interest rate by 25 Basis Points (0.25%) to catch up with its counterpart, the European Central Bank (ECB), creating more room for the Bitcoin (BTC) price to rise.
Central Bank of Denmark Rationale
Lowering interest rates may have different fundamental reasons for different central banks, but primarily slowing inflation is the basis of the consensus. In the case of national banks, the move to reduce the interest rate by 0.25% to peg it at 3.35% is driven by the need to keep the Krone as close to the Euro as possible.
Central banks in the G7 bloc are on a common mission to lower interest rates. This, as envisioned, aims to push new boundaries for the economy, which includes both traditional markets and Bitcoin extending into altcoins. During this week, the Bank of Canada also reduced its interest rate by 25 basis points.
Earlier today, the European Central Bank made the same move, prompting the US Federal Reserve, the Bank of England and the Bank of Japan to announce their own interest rate cuts. The outlook for financial markets is worth considering carefully, as risk assets such as Bitcoin and some stocks stand to benefit from these low rates.
Although the Federal Reserve has always maintained a certain level of autonomy in monetary policies, interest rate cut talks have been going on for a very long time. To date, many analysts and banks have continued to speculate whether the Fed will cut interest rates this year.
The influence of the Danish cut seems to be diminishing quite quickly as it is still fresh in the market.
Bitcoin Price and Intermittent Breakout
While the monetary decisions of the world’s largest central banks are taking shape, Bitcoin has remained largely unaffected by this trend. Currently, the cryptocurrency is changing hands for $70,716.72, up 0.75% in the last 24 hours.
Bitcoin price did not change much during the week. Although it reversed the $70,000 price level as support, this point served as resistance for a while; This trend may lend credence to the potential impact of rate cut announcements so far.
While Bitcoin may have other catalysts that could help fuel its growth towards an All Time High (ATH), macroeconomic considerations cannot be ignored in the push for a mega BTC exodus right now.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-life applications of blockchain technology and innovations to ensure mainstream acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture. follow him excitementLinkedIn
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