Things are different now. Bitcoin spent the first quarter stuck near $4,000, but then sprung back to life, surging past $10,000, partly because of the U.S.-China trade war and Facebook’s plan to launch Libra, its own digital currency.
The Federal Reserve has added fuel to the rally as it has shifted from raising interest rates in 2018, to keeping borrowing costs steady, to its current strong hints that a reduction is on the way. A move is expected when a two-day meeting of key officials ends on Wednesday. Easier monetary policy could bring more gains for Bitcoin.
As much as bitcoin enthusiasts want to connect bitcoin price moves to monetary policy, fiscal policy, corporate earnings, debt to GDP ratios, and whether or not aliens have ever visited Earth, the fact is that the only thing that contributes to bitcoin price movement is speculation.
For both those involved in Bitcoin and traditional markets, all eyes have been on the Federal Reserve over the past few months.
Many analysts claim that whatever the American monetary authority decides to do with monetary policy will dictate the direction for global markets, and, potentially, the fate of the current fiat economic hegemony.