BTC drops below $61,000 while stock indices hit record highs.

The price of Bitcoin fell below the $61,000 mark, despite stock indices reaching new all-time highs. The S&P 500 index hit a record high, increasing by 0.6% to 5,509 points. This comes after Federal Reserve Chairman Jerome Powell stated that progress has been made on inflation.

On Wednesday morning, Bitcoin's price dropped to below $60,000 overnight, marking a decrease of over 2.5% in the last 24 hours.

Federal Reserve Statements

Federal Reserve Chairman Jerome Powell recently stated that the central bank has made “significant progress” on inflation but needs more certainty before reducing rates. Powell and European Central Bank (ECB) President Christine Lagarde discussed monetary policy during the ECB Central Banking Forum in Sintra. Powell indicated that the labor market remains strong and the disinflation trend is resuming, showing progress on inflation.

Global Stock Market Performance

The Fed's statements impacted the stock markets, with futures rising following the inflation remarks. Dow Jones Industrial Average futures increased by 0.073%, and S&P 500 futures rose by 0.018% in pre-market trading. On Tuesday, the S&P 500 closed up 0.6% at 5,509.01 points, surpassing the record set two weeks ago. The Dow Jones Industrial Average increased by 0.4% to 39,331.85 points, and the Nasdaq Composite added 0.8% to 18,028.76 points, exceeding the previous day's record.

Interest Rate Forecasts

Market participants closely monitor inflation data to predict when the U.S. Federal Reserve might begin lowering interest rates. Powell's comments at the ECB increased expectations of a rate cut in September. According to the CME Group FedWatch Tool, traders raised the probability of a rate cut at the September Federal Open Market Committee (FOMC) meeting from 59% to 67%.

Standard Chartered's Bitcoin Forecast

According to Standard Chartered, Bitcoin's price could reach a new all-time high in August, followed by a rise to $100,000 by the U.S. presidential election in November. Geoffrey Kendrick, head of forex and digital asset research at Standard Chartered, stated that a new all-time high for Bitcoin in August is likely, with further growth to $100,000 by election day.

Alternative Scenarios

Kendrick outlined an alternative scenario where President Joe Biden exits the presidential race in late July, which could cause Bitcoin's price to drop to $50,000-$55,000. He added that if Biden's Democratic replacement were highly credible, such as Michelle Obama, Bitcoin's price would remain weak. The key date for Biden's stay in the race is August 4, according to Kendrick. In conclusion, Standard Chartered's analyst Kendrick maintained his optimistic price prediction of $150,000 for Bitcoin by the end of 2024 and $200,000 by the end of 2025.