The price of Bitcoin made an early weekend spike following Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium. According to the latest on-chain observation, the announcement of possible rate cuts has led to an increase in Bitcoin demand over the past day.
BTC Demand Growing in the US — Impact on Price?
In a recent post on the X platform, Julio Moreno, Head of Research at CryptoQuant, said revealed that demand for Bitcoin in the United States has increased over the past 24 hours. This growth came after the Fed announced that a cycle of lower interest rates would begin soon.
Lower central bank interest rates are often a welcome development for risky assets like Bitcoin, the world’s largest cryptocurrency. Falling interest rates typically reduce the gains on traditional financial instruments like bonds, making cryptocurrencies more attractive options for investors seeking higher returns.
According to Moreno, the BTC price premium on Coinbase — the largest cryptocurrency exchange in the US — has risen to its highest level since mid-July. For comparison, the Coinbase premium refers to the difference between the value of the coin on Coinbase and other global centralized exchanges.
Chart showing BTC's Coinbase premium index | Source: jjcmoreno/X
When the BTC price premium on Coinbase increases, it usually means there is an increasing demand from American investorsbecause they are willing to spend more to acquire Bitcoin. As explained earlier, this increased demand makes sense given the likelihood of interest rate cuts and less profitable traditional financial instruments.
The increasing demand is a particularly good sign for Bitcoin’s price, as it suggests that investors are positioning themselves to capitalize on a promising crypto future. At the same time, growing demand and a rising price premium could result in increased market volatility.
Moreover, the rising US Bitcoin demand comes at just the right time as demand growth has remained at a low level in recent weeks. CryptoQuant observed in a report that demand for BTC has been sluggish since April 2024, when the coin’s price was around $70,000.
According to the blockchain intelligence firm, apparent demand will need to grow somewhat for BTC’s price to see some daylight. Ultimately, if the growing demand in the United States continues and spreads to other markets, investors could see the flagship cryptocurrency return to near its all-time highs.
Bitcoin Price at a Glance
At the time of writing, the price of BTC is hovering around $64,000, reflecting a surge of over 5% in the past day. According to data from CoinGecko, the leading cryptocurrency is up 7.5% in the past week.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Main image from iStock, chart from TradingView