Bitcoin price saw an early rally over the weekend following Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium. According to the latest on-chain note, the announcement of potential interest rate cuts has increased demand for Bitcoin in the past day.
Bitcoin Demand Grows in the US – Will It Impact the Price?
In a recent post on the X platform, CryptoQuant’s Head of Research, Julio Moreno, said: open Demand for Bitcoin in the United States has surged over the past 24 hours. The growth came after the Federal Reserve announced that a low interest rate cycle would begin soon.
Low interest rates from central banks are often a welcome development for risky assets like bitcoin, the world’s largest cryptocurrency. Low interest rates tend to reduce returns on traditional financial instruments like bonds, making cryptocurrencies more attractive options for investors seeking higher returns.
According to Moreno, the Bitcoin price premium on Coinbase — the largest cryptocurrency exchange in the United States — has risen to its highest level since mid-July. In this context, the Coinbase premium refers to the difference between the value of a currency on Coinbase and other centralized global exchanges.
Chart showing BTC's Coinbase premium index | Source: jjcmoreno/X
Typically, when the Bitcoin price premium on Coinbase rises, it means there is increased demand from US investors, as they are willing to spend more to acquire Bitcoin. As we explained earlier, this increased demand makes sense given the potential for lower interest rates and lower profitability of traditional financial instruments.
Increasing demand is a particularly good sign for Bitcoin’s price, as it suggests that investors are ready to cash in on the cryptocurrency’s promising future. At the same time, increasing demand and a high price can lead to high market volatility.
Moreover, the increased demand for Bitcoin in the US comes at just the right time, as demand growth has remained at low levels over the past few weeks. Note In a report that indicates that apparent demand for BTC has been slow since April 2024 when the coin was priced at around $70,000.
According to the blockchain intelligence firm, the obvious demand needs to see some growth before the Bitcoin price can see some light. Ultimately, if the growing demand in the US continues and spreads to other markets, investors could see the leading cryptocurrency return to its all-time highs.
Bitcoin Price at a Glance
At the time of writing, Bitcoin is hovering around $64,000, reflecting a 5% increase in the past day. According to CoinGecko data, the leading cryptocurrency has gained 7.5% in the past week.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image by iStock, chart by TradingView
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