Bank of Korea Rate Cut Speculation Fuels Bitcoin’s Rise

The Bank of Korea (BoK) is possibly considering rate cuts, according to reports. Governor Rhee Chang Yong stated in a discussion that upcoming events like the United States Federal Reserve’s policy decision, Bank of Japan Governor Ueda’s testimony to Parliament, and the release of US labor data could cause significant market volatility.

The report suggests that the BoK will not make any immediate changes but will closely watch the impact of these events on Korean markets before deciding. Interestingly, the Board’s policy stance currently leans towards rate cuts and monetary easing.

Looking ahead to the next three-month policy discussion, four out of six officials at the Bank of Korea favor rate cuts, while the other two prefer to keep rates unchanged at 3.5%. With no minority vote during the meeting, it seems the BoK is heading towards rate cuts in October. The report also noted a shift in the regulator’s view on inflation.

Rising home prices and increasing household debt are the BoK’s main concerns. These factors are key reasons why the Bank of Korea will wait for the Fed’s decision before taking action in October or November.

The Bank of Korea expressed “uncertainty” regarding inflation but now portrayed “greater confidence that inflation will converge on the target level.” These optimistic changes could set up a bullish rally for Bitcoin (BTC), the world’s largest cryptocurrency, which usually benefits from rate cuts, as investors flock towards assets with higher risks and volatility.

According to CoinMarketCap, Bitcoin is up 2.23% in the past 24 hours and is trading at $60,687 with a market capitalization of $1.2 trillion and a trading volume of $34.57 billion. The cryptocurrency is down 17.77% from its all-time high of $73,000, witnessed in March and there is possibility of higher prices if BTC retains price action above $61,000.

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