The European Central Bank's commitment last week to cut interest rates and purchase assets as necessary to protect the eurozone economy, and the Federal Reserve's hinting that it could cut rates as soon as next month, may be fueling demand for cryptocurrencies.
Lower interest rates reduce borrowing costs and discourage saving. As central banks pursue expansionary monetary policies, bitcoin buyers may be anticipating an influx of liquidity into markets that will push cryptocurrency prices higher.
"The liquidity injection from central banks has forced a range of assets like gold, bonds, the yen etc, so bitcoin is just being swept along by those macro currents," said Neil Wilson, chief market analyst for Markets.com.
"Nominal and real yields have retreated sharply, reducing the opportunity cost of holding (or HODLing) bitcoin," he added, referencing the acronym used to describe bitcoin owners who 'hold on for dear life.'