Opinion: The Fed's rate cut probability by mid-year is more than 45%, or it will benefit Bitcoin

Traders believe that Federal Reserve Chairman Jerome Powell is more than 45% likely to cut rates again by June of this year. There are many reasons. The minutes of the Federal Reserve's January meeting announced this week will provide more details. And this could have an impact on Bitcoin. The news may surprise many people after the stock market hit a record high. Driven by traders, the S & P 500 Index rose 4.6% so far in February, the largest gain since 2015.

However, Powell and the Federal Reserve believe that the US economy is on the verge of a potential recession. The interest rate cut will help prevent this event from happening and bring the recent “surge” economy to a “soft landing”. A rate cut may occur before mid-year. Regardless of how people view current liquidity issues, such a rate cut could push up the price of Bitcoin. A rate cut indicates a weak economy, and since Bitcoin is considered a "hedging" asset, it could benefit from this situation. In addition, cutting interest rates and increasing liquidity will also mean higher inflation. Bitcoin is already seen as a tool to hedge against inflation, so if the Fed really cuts interest rates, the price of Bitcoin could rise sharply.