Bitcoin soars to a one-month high amid central banks' easing policies
Bitcoin prices have surged to their highest level since 26 August, propelled by an acceleration in the global central banks' easing cycle.
The largest cryptocurrency has soared 21% since the second week of September, with its price climbing from above $53,000 (€47,400) to more than $64,000 (€57,200) on Wednesday.
Cryptocurrencies are among the high-risk assets that have experienced a significant rally amid central banks' commitments to reduce interest rates.
In September, the European Central Bank implemented its second rate cut of the year, followed by the US Federal Reserve's substantial 0.5% reduction.
On Tuesday, the People's Bank of China introduced a series of easing measures, including cuts to key lending rates and increased cash injections into the markets to bolster its economy.
These looser liquidity conditions have fuelled a rally in the digital token markets, propelling Bitcoin prices to a one-month high.
Historically, Bitcoin prices have tended to trend upwards during periods when the Fed's monetary policy shifts to easing.
During the 2020 pandemic, Bitcoin prices skyrocketed by 1,600%, reaching more than $64,000 in April 2021 from the previous year.
This price surge was primarily driven by global central banks' near-zero interest rate policies, which unleashed significant liquidity into the markets, alongside a Bitcoin frenzy in mining and trading activities.
However, the crypto markets experienced a sharp decline from their peak in November 2021, when the Fed signalled its intention to tighten monetary policy. Consequently, Bitcoin plummeted by 78%, falling to just above $15,000 (€13,400) by November 2022.
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