Bitcoin, Cryptocurrencies Are Undervalued On Possible New Money Printing By The Federal Reserve

Bitcoin's price could reach 50 000 USD in 2024 as the Federal Reserve, the central bank of the United States of America could possibly lower the Federal Funds Rate and start printing money again.

The Personal Consumption Expenditure, the preferred inflation gauge watched by the Federal Reserve eased up significantly lately, which increased the calls for the US' central bank to start lowering its key Federal Funds interest rate in order to prevent the economy from crashing.

Many Wall Street research analysts are either forecasting or hoping for a soft landing of the US and by extension the global economy. In order to engineer such and outcome, Wall Street research analysts' calls on interest rates and the economy are de facto pressuring the Federal Reserve to decrease interest rates levels.

 

Actually, such an outcome is far from certain, according to Wolfteam Ltd.'s corporate opinion. The military encounters Russia Ukraine and Israel Hamas could stoke further inflation. However, if these military conflicts are not aggravated or expanded the effect on inflation is likely to be smaller than the initial jump in Consumer Price Indices all over the world, when Russia invaded Ukraine.

Realistic forecasts, in Wolfteam Ltd.'s view is for the Federal Reserve to start targeting lowering interest rates levels is for the second half of 2024. Currently, the Wall Street research analysts' consensus that the Federal Reserve might start lowering the Federal Funds Rate target in end 1Q2023 and 2Q2023 is highly optimistic, unrealistic even. This all might be predicated on the large equities portfolios held by Wall Street investment banks and the fact that lowering interest rates levels could spur again the Initial Pubic Offerings and mergers and acquisitions and debt underwriting business, the highest margins businesses of Wall Street Banks.

Bitcoin, as a risk asset will naturally benefit if the Federal Reserve starts lowering interest rates. When interest rates levels decrease, people can take out loans and invest in the stock market and cryptocurrencies. Once, more investing flows start coming into Bitcoin, other cryptocurrencies these developments could raise the price of Bitcoin to and above 50 000 USD.

What is more, with more money available in the world, this increased risk sentiment overall and individual investors are more likely to start dabbling again more into cryptocurrencies. Once liquidity in Bitcoin, cryptocurrencies increased this will likely drive more investment flows from asset managers and hedge funds into cryptocurrencies. 

If institutional investors have money available, they are more likely to devote some or larger parts of their portfolios to Bitcoin, cryptocurrencies investing. Institutional investors, asset managers and hedge funds especially can take on loans to invest or leverage or the 100/30 investing models, where asset managers borrow 30 % from their equity to invest further along the risk scale. Lower interest rates ensure better conditions for such loans, more money for asset managers and hedge funds, part of which could flow into Bitcoin, cryptocurrencies.

All in all, if financing conditions become more benign, this could raise the price of Bitcoin to and above 50 000 USD in 2024 and with it drag higher other cryptocurrencies as Ethereum, Ripple, Dogecoin higher, according to Wolfteam Ltd.'s macroeconomic projections and estimates.