Bitcoin could top $100K but only if ‘high-yield rate’ falls below 7% — Analyst


One analyst says only one main indicator is necessary to predict whether Bitcoin can surpass its all-time high of $73,700 later in 2024, and it all rests on the shoulders of the United States Federal Reserve. 

“The U.S. high yield rate is a great indicator, and it really needs to drop below 6 or 7% for a sustainable all-time high,” Timothy Peterson, Cane Island Alternative Advisors founder and investment manager, told Cointelegraph. He explained that the primary measure he looks to for Bitcoin (BTC) price action is interest rate movement.

At the time of publication, the U.S. high yield rate — which represents the rate of high-yield corporate bonds because of their higher risk of default — is 7.54%, according to YCharts data.

Peterson predicted that if yield rates fall within the “6 or 7%” range, Bitcoin could see the much-anticipated $100,000 price tag by the fourth quarter of 2024 or, at the latest, the second quarter of 2025.

The U.S. high yield B effective yield is currently 7.54%. Source: YCharts

Typically, the Federal Reserve lowering interest rates leads to the high-yield rate following suit, something that nearly two-thirds of economists surveyed predict will happen in September, according to a recent survey conducted by Reuters.

Interest rates are perceived as an important indicator for crypto traders, as lowering rates typically leads to less yield for investors in safe-haven securities such as bonds and term deposits.

As a result, more investors turn to riskier assets such as Bitcoin to achieve better returns on investment.

Bitcoin trades at $61,871 at the time of writing, down 5.08% over the past 30 days. Source: CoinMarketCap

Peterson argued that overall markets are generally “flat and volatile” between September and October.

“Not always, but many times,” he commented. However, with the upcoming U.S. election, he claimed the “uncertainty will be higher through October” ahead of the election day, currently slated for Nov. 4.

Related: Bitcoin traders expect Fed Chair Powell to ‘pump our bags’ and BTC to target $80K+

Meanwhile, crypto analyst Scott Melker, also known as “The Wolf of All Streets,” declared that the Fed cutting interest rates isn’t always favorable for assets outside of fixed-income investments.

“There is a wildly popular theory that a Fed pivot is good for markets,” he stated in a May 14 post on X.

“Rate cuts generally precede major dips,” he commented on the wider overall market.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.