Key takeaways
- Fed rate cut sends Bitcoin up 6%, but BOJ decision could impact gains
- Bitcoin could benefit from additional Fed rate cuts expected by year-end.
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Bitcoin is trading near $63,000, up 6% in the past 24 hours after the Federal Reserve cut its benchmark interest rate by 50 basis points. The move also boosted the overall cryptocurrency market, with the total market cap rising 2% in response.
The rate cut is seen as supportive for tangible assets like Bitcoin, which often benefit from inflationary pressures. However, the rate cut appears more reactive, responding to growing economic concerns. Despite this, the market response has been positive, reflecting investor optimism.
The Fed’s decision to cut rates by half a percentage point was seen as a preemptive measure to address a possible slowdown in the labor market. While many investors had expected some easing, expectations were mixed, with some predicting a more modest 25 basis point cut.
In the future, further reductions are expected, with CME Group FedWatch Tool suggesting further easing by the end of the year.
Although September is historically Bitcoin’s worst performing month, it is on the rise 7% this time. However, caution remains in order as the market looks ahead to the Bank of Japan’s upcoming monetary policy meeting, which could significantly influence Bitcoin’s future price.
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