Bitcoin continued its recent strength to reach a fresh record high nearing the $72,000 mark on Monday morning, buoyed by market hopes of looming Federal Reserve interest rate cuts.
The world’s biggest cryptocurrency was trading at $71,700 by mid-morning, up 3.1 per cent for the day and more than 60 per cent since the start of the year.
Bitcoin’s momentum also continues to be driven by flows into newly launched US spot Bitcoin ETFs, which have recorded cumulative flows of more than $106billion since the start of the year.
Fed rate cuts hopes continue to lift Bitcoin and gold
Softer-than-expected US labour market data on Friday added to expectations the Fed will cut rates in June.
Market pricing currently places a 73.9 per cent chance the Fed will cut its current target rate range of 5.25 to 5.5 per cent by 25 basis points in June, brining it to a range of 5 to 5.25 per cent, according to CME Group data.
Expectations of rate cuts globally have also helped to drive gold to record highs.
The LBMA London Gold Price was up 4.2 per cent last week to $2171.20 on Friday evening, taking 2024 gains to 18.3 per cent.
> Gold price hits record high: What’s behind the latest surge and how do you invest in it?
Ned Naylor-Leyland, investment manager, gold and silver, at Jupiter Asset Management, said: ‘Gold is always forward looking and has thus largely digested a reduced outlook for rate cuts from the Fed in 2024 (bond market has three cuts by year-end).
‘Moreover, there’s growing anticipation in the markets regarding the Fed’s expected transition towards a more accommodative monetary policy stance, which is why we are seeing gold trend higher recently.’
