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Bitcoin Moves Higher Amid Arguments That Rate Cuts Provide Reason to Buy

© Reuters.
© Reuters.

Investing.com – Cryptocurrencies overall traded slightly lower on Thursday, while some observers suggested the upward move in Bitcoin was due to the Federal Reserve rate cut.

Total cryptocurrency market capitalization decreased to $275.27 billion by 11:29 AM ET (15:29 GMT), compared to $277.58 billion a day earlier.

, the largest alt coin by market cap, rose 0.5% to $9,995.1 on the Investing.com Index.

In other cryptocurrency trading, fell 0.9% to $212.51 by 9:42 AM ET (13:42 GMT), lost 2.4% to $0.31237, traded up 1.9% to $96.133, while declined 1.5% to $323.27.

Although financial markets were reeling from the fact that the Federal Reserve refrained from being as aggressive on easing monetary policy as expected, Albert Silbert, managing director at cryptocurrency platform INX Limited, said the quarter-point interest cut and his expectations for further cuts were reason enough to invest in the largest digital coin by market cap.

Silbert tweeted that the interest rate was already down and – despite indications to the contrary from Fed Chairman Jerome Powell himself – further cuts are on the way. A lower rate means fewer reasons to hold the U.S. dollar, he said. “Buy bitcoin.”

The argument is based on the idea that lower interest rates hamper fiat currencies, reducing their purchasing power, while decentralized cryptocurrencies in general are not subject to such market manipulation.

With digital currencies overall trading lower, Thursday’s move in bitcoin is arguably more likely to come as a bounce after a nearly 7% decline in July, its first monthly drop after five straight months of gains.

In other cryptocurrency news, the network has reportedly mined 85% of the total planned supply of bitcoin, leaving approximately 3.2 million bitcoins available.

Data from Blockchain, that monitors total supply, said the number of mined bitcoins had hit 17,850,088, compared to the total limit of 21,000,000.

One of the arguments for bitcoin as a store of value is that the supply of total bitcoins is limited and specific, unlike fiat currencies whose governments can indiscriminately print money or gold whose total supply is unknown.

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Source: investing.com
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