Bitcoin hovers close to $58,000 on central bank pledge to keep rates near zero

The price of Bitcoin (BTC) shifted to the green zone after US central bank officials reaffirmed their projections to keep interest rates close to zero at least in the next two years, potentially boosting the digital currency’s appeal as a hedge against inflation.

Bitcoin was trading around $58,000, up from around $55,500 just before the Federal Reserve announced its interest rate decision. Bitcoin and cryptocurrency prices have risen in the last 7 days, with the consolidated value of the virtual currency market again approaching the $2 trillion level.

Crucial stage in bull run

Bitcoin is now at a critical phase in its bull market cycle, with multiple market observers anticipating a new all-time high beyond $62,000, while others suggest the peak may be in after more than a year of consistent upside price action.

Central banks around the globe have poured in trillions of dollars of newly created money into the world’s financial markets to lift their pandemic-hit economies.

Morgan Stanley’s wealth management arm published a research document on Thursday claiming the “threshold is being reached” for cryptocurrency to become an investable class of asset.

After ushering in 2021 at around $30,000 per BTC, Bitcoin has grown twofold — climbing as a result of Wall Street institutional adoption and corporate interest from the likes of Tesla CEO Elon Musk. Analysts expect more investors will follow suit.

BTC as an asset class

Cryptocurrencies are becoming very popular and gaining credibility as an asset class as a derivatives market develops, institutions flock to space and prices soar. Bitcoin is viewed by some as a viable form of investment and the best alternative to gold — even a potential safe haven from inflation because of its limited supply.

Meanwhile, the number of bitcoin ATMs has increased by 70% around the world, reaching 16,500 this month, a new report shows.

A bitcoin ATM is a kiosk that enables a person to buy bitcoin through the use of cash or debit card. Some offer both the purchase of BTC as well as its sale for cash.

 

Image courtesy of Roger Brown/Pexels

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