Warsh Sways Bitcoin Rally, Declares End of Cheap Money Era

Bitcoin's August rally has come to an end as Fed Chair Kevin Warsh declared that the era of 'cheap money' is over. The cryptocurrency gained around 26% throughout August, driven by speculation over a weakening US dollar.

This optimism was short-lived as investors began to worry about the impact of higher interest rates on risk assets. According to Warsh, global economic dynamics have shifted significantly, and economic growth has become increasingly accelerative.

The surge in capital flowing into the artificial intelligence sector has also contributed to this shift, with interest rates tending to move upward instead of downward as many had previously expected.