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The previous Fed rate cut shows that Bitcoin is not a "safe haven asset"

price analysis July 4: Will Bitcoin mark its fifth consecutive year of growth on US Independence Day?

The performance of Bitcoin (BTC) after the last three US Federal Reserve (Fed) cut interest rates shows that the currency is not a safe haven asset, according to research of The Block.

In 2019, the Fed lowered interest rates 3 times – currently at 175 bps. In 3 cuts, the price of Bitcoin did not show any significant increase, the study found. In contrast, the average profit of king coins in the period of 1 week, 1 month and 3 months are -5%, -20.9% and -11%, respectively.

What happened to Bitcoin after cutting interest rates
What happened to Bitcoin after cutting interest rates. Source: The Block

A common argument for Bitcoin as a safe-haven asset is that in the course of macro volatility, the Fed's action to step in and lower interest rates is a net benefit to risky and non-risky assets. inflation like gold.

Therefore, when the market predicts another Fed rate cut, some analysts believe that Bitcoin will have a chance to recover.

However, The Block's analysis shows that lowering interest rates is not correlated with Bitcoin's price movement. Therefore, the coin is not likely to rise in the next rate cut.

The most recent macro upheaval was when the US killed a major Iranian general, then the global corona virus spread triggered a new round of discussion about Bitcoin acquiring investors. accept as a safe haven property or not.

However, similar to the US stock market, Bitcoin price has tended to decrease in the second half of February due to corona virus, currently standing at about $ 8,550.

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According to The Block
Translated by ToiYeuBitcoin

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