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After a volatile August, Bitcoin has been regaining momentum in September, gaining about 5.6% month to date. Growing institutional adoption, a weakening greenback and interest rate cuts by the Fed pave the way for a highly optimistic future for the digital asset, outweighing any concerns over volatility.
Increasing interest from institutional investors is sending a positive signal to the market, reflecting the confidence of the world’s largest institutions in digital currency. Additionally, pro-crypto moves by the Trump administration are another key tailwind for the asset.
Bitcoin Rallies on Growing Rate Cut Expectations
The main reason behind Bitcoin’s surge is strong market expectations of Fed easing. With the Fed widely expected to cut rates at its September meeting, the key question is the size of the move. Markets largely anticipate a 25-bps cut, which is already priced in. However, a surprise 50-bps reduction could trigger a sharp rally in Bitcoin.
According to Alex Kuptsikevich, chief market analyst at FxPro, the key driver will be the Fed’s tone on future policy moves, as quoted on Forbes. Kuptsikevich also stated that if the Fed shows willingness to ease further, Bitcoin may push into record territory.
Further Fed interest rate cut could boost investor risk appetite, potentially leading to increased exposure to digital currencies. Additionally, lower interest rates would leave investors with more capital, often leading to increased interest in cryptocurrency.
According to the CME FedWatch tool, markets are anticipating a 74.8% likelihood of interest rates falling to 3.75-4% in October and a 69.7% likelihood of interest rates falling to 3.5-3.75% in December.
Dollar Weakness Boosts Bitcoin Appeal
Cryptocurrency, an alternative to traditional currencies, tends to gain from a weaker greenback. The greenback continues to remain under heavy pressure this year, following its weakest first-half performance since the 1970s.
According to TradingView, the U.S. Dollar Index (DXY) has fallen 1.22% over the past month and 10.57% year to date. The index has recorded an all-time decline of 19.10%.
Bitcoin’s Path Looks Northbound
Per TradingView, top financial institutions maintain an overwhelmingly positive stance on Bitcoin’s price. Standard Chartered projects the digital currency to reach $200,000 by the year’s end, driven by institutional adoption and clearer regulatory frameworks, marking a rise of about 73% from Bitcoin’s current price level.
According to VanEck, Bitcoin is forecasted to reach $180,000 by this year, supported by institutional flows over the long term. Additionally, VanEck also projects a long-term price target of $2 million by 2050.
Per TradingView, Wall Street’s average Bitcoin price target stands at $156,000.
ETFs to Watch
Below, we have mentioned a few ETFs for investors to increase their portfolios’ exposure to digital currencies. However, investing in digital currencies does require increased risk appetite, and it’s important for investors to stay alert and track the developments.
With a one-month average trading volume of 42.07 million shares, IBIT is the most liquid option, ideal for active trading strategies. IBIT has also gathered an asset base of $86.63 billion, the largest among the other options.
Regarding annual fees, IBIT is the cheapest option, charging 0.12%, making it more suitable for long-term investing. BTC is a cheaper alternative to Grayscale Bitcoin Trust. BTC charges an annual fee of 0.15%.
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Will Rate Cuts Fuel Bitcoin ETF Momentum?
After a volatile August, Bitcoin has been regaining momentum in September, gaining about 5.6% month to date. Growing institutional adoption, a weakening greenback and interest rate cuts by the Fed pave the way for a highly optimistic future for the digital asset, outweighing any concerns over volatility.
Increasing interest from institutional investors is sending a positive signal to the market, reflecting the confidence of the world’s largest institutions in digital currency. Additionally, pro-crypto moves by the Trump administration are another key tailwind for the asset.
Bitcoin Rallies on Growing Rate Cut Expectations
The main reason behind Bitcoin’s surge is strong market expectations of Fed easing. With the Fed widely expected to cut rates at its September meeting, the key question is the size of the move. Markets largely anticipate a 25-bps cut, which is already priced in. However, a surprise 50-bps reduction could trigger a sharp rally in Bitcoin.
According to Alex Kuptsikevich, chief market analyst at FxPro, the key driver will be the Fed’s tone on future policy moves, as quoted on Forbes. Kuptsikevich also stated that if the Fed shows willingness to ease further, Bitcoin may push into record territory.
Further Fed interest rate cut could boost investor risk appetite, potentially leading to increased exposure to digital currencies. Additionally, lower interest rates would leave investors with more capital, often leading to increased interest in cryptocurrency.
According to the CME FedWatch tool, markets are anticipating a 74.8% likelihood of interest rates falling to 3.75-4% in October and a 69.7% likelihood of interest rates falling to 3.5-3.75% in December.
Dollar Weakness Boosts Bitcoin Appeal
Cryptocurrency, an alternative to traditional currencies, tends to gain from a weaker greenback. The greenback continues to remain under heavy pressure this year, following its weakest first-half performance since the 1970s.
According to TradingView, the U.S. Dollar Index (DXY) has fallen 1.22% over the past month and 10.57% year to date. The index has recorded an all-time decline of 19.10%.
Bitcoin’s Path Looks Northbound
Per TradingView, top financial institutions maintain an overwhelmingly positive stance on Bitcoin’s price. Standard Chartered projects the digital currency to reach $200,000 by the year’s end, driven by institutional adoption and clearer regulatory frameworks, marking a rise of about 73% from Bitcoin’s current price level.
According to VanEck, Bitcoin is forecasted to reach $180,000 by this year, supported by institutional flows over the long term. Additionally, VanEck also projects a long-term price target of $2 million by 2050.
Per TradingView, Wall Street’s average Bitcoin price target stands at $156,000.
ETFs to Watch
Below, we have mentioned a few ETFs for investors to increase their portfolios’ exposure to digital currencies. However, investing in digital currencies does require increased risk appetite, and it’s important for investors to stay alert and track the developments.
Investors can consider iShares Bitcoin Trust ETF (IBIT - Free Report) , Fidelity Wise Origin Bitcoin Fund (FBTC - Free Report) , Grayscale Bitcoin Trust ETF (GBTC - Free Report) , ARK 21Shares Bitcoin ETF (ARKB - Free Report) and Grayscale Bitcoin Mini Trust ETF (BTC - Free Report) .
With a one-month average trading volume of 42.07 million shares, IBIT is the most liquid option, ideal for active trading strategies. IBIT has also gathered an asset base of $86.63 billion, the largest among the other options.
Regarding annual fees, IBIT is the cheapest option, charging 0.12%, making it more suitable for long-term investing. BTC is a cheaper alternative to Grayscale Bitcoin Trust. BTC charges an annual fee of 0.15%.