Here’s How US Bitcoin Demand Spiked Following Fed Chair’s Speech

The
price
of
Bitcoin
experienced
an
early
weekend
surge
following
Federal
Reserve
Chairman
Jerome
Powell’s
speech
at
the
Jackson
Hole
symposium.
According
to
the
latest
on-chain
observation,
the
announcement
of
potential
interest
rate
cuts
has
led
to
an
increase
in
Bitcoin
demand
in
the
past
day.

BTC
Demand
Sees
Growth
In
The
US
—
Impact
On
Price?

In
a
recent
post
on
the
X
platform,
CryptoQuant’s
Head
of
Research
Julio
Moreno
revealed
that
demand
for
Bitcoin
has
been
on
the
rise
in
the
United
States
in
the
past
24
hours.
This
growth
came
on
the
back
of
the
Fed
disclosing
that
a
cycle
of
lower
interest
rates
would
soon
commence.

Lower
interest
rates
by
the
central
bank
are
often
a
welcome
development
for
risky
assets
like
Bitcoin,
the
world’s
largest
cryptocurrency.
Falling
interest
rates
tend
to
diminish
the
profits
on
traditional
financial
instruments
such
as
bonds,
making
cryptocurrencies
more
attractive
options
for
investors
seeking
higher
yields.

According
to
Moreno,
the
BTC
price
premium
on
Coinbase
—
the
largest
cryptocurrency
exchange
in
the
US
—
has
surged
to
its
highest
level
since
mid-July.
For
context,
the
Coinbase
premium
refers
to
the
difference
between
the
coin’s
value
on
Coinbase
and
other
global
centralized
exchanges.

Chart showing BTC's Coinbase premium index | Source: jjcmoreno/X

Typically,
when
the
BTC
price
premium
on
Coinbase
is
rising,
it
implies
that
there
is
increasing
demand
from
US
investors,
as
they
are
willing
to
spend
more
to
acquire
Bitcoin.
As
earlier
explained,
this
heightened
demand
makes
sense
given
the
likelihood
of
interest
rate
cuts
and
less
profitable
traditional
financial
instruments.

Increasing
demand
is
a
particularly
good
sign
for
the
price
of
Bitcoin,
as
it
suggests
that
investors
are
positioning
themselves
to
reap
from
a
promising
crypto
future.
At
the
same
time,
the
growing
demand
and
the
rising
price
premium
could
result
in
elevated
market
volatility.

Furthermore,
the
increasing
US
Bitcoin
demand
comes
just
at
the
right
time,
as
demand
growth
has
remained
at
low
levels
over
the
past
few
weeks.
CryptoQuant
observed
in
a
report
that
BTC’s
apparent
demand
has
been
sluggish
since
April
2024
when
the
coin’s
price
was
around
$70,000.

According
to
the
blockchain
intelligence
firm,
the
apparent
demand
needs
to
see
some
growth
for
BTC’s
price
to
see
some
daylight.
Ultimately,
if
the
growing
demand
in
the
United
States
is
sustained
and
spread
to
other
markets,
investors
could
see
the
flagship
cryptocurrency
return
to
around
its
all-time
high.

Bitcoin
Price
At
A
Glance

As
of
this
writing,
the
price
of
BTC
is
hovering
around
$64,000,
reflecting
an
over
5%
increase
in
the
past
day.
According
to
data
from
CoinGecko,
the
premier
cryptocurrency
is
up
by
7.5%
in
the
past
week.

The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured
image
from
iStock,
chart
from
TradingView