Bitcoin Surges Past $60K Amid Federal Reserve Rate Announcement
Bitcoin made a strong comeback on Tuesday, surpassing the $60,000 mark as investors eagerly awaited the Federal Reserve’s upcoming rate cutting plans. The price of the flagship cryptocurrency soared by 4.3% to reach $60,394.41, with a peak at $61,335.83. This surge was initially fueled by former President Donald Trump’s announcement of his new crypto venture, World Financial Liberty Coin, on Monday night.
Federal Reserve Meeting Impact on Bitcoin
The rise in Bitcoin’s value on Tuesday morning coincided with the start of the Federal Reserve’s two-day policy meeting. Speculation is rife that the central bank will implement an interest rate cut for the first time in four years, a move that is expected to bolster risk assets like bitcoin. Philipp Pieper, co-founder of Swarm Markets, highlighted the potential short-term market volatility in response to the Fed’s decision, but emphasized the positive long-term outlook for Bitcoin and other cryptocurrencies.
According to Pieper, easing monetary conditions could usher in a fresh bull cycle for Bitcoin and Ethereum, as well as the broader crypto market. Historically, Bitcoin has shown some correlation with major tech indices such as the Nasdaq, and tends to move in alignment with monetary policies as investors seek higher returns in low-rate environments.
Market Speculation on Fed Rate Cut
Market analysts and traders are divided on the extent of the expected rate cut by the Federal Reserve, with debates centered around a 25 or 50 basis point reduction. Currently, traders are leaning towards a 63% probability of a 50 basis point rate cut, as indicated by CME Group’s FedWatch Tool. Each basis point represents a 0.01% change in interest rates.
Bitcoin has experienced fluctuation within the $55,000 to $70,000 range throughout the year. Investors have been closely monitoring developments such as Fed rate cuts, the emergence of bitcoin ETFs, and the outcome of the U.S. presidential election as potential catalysts for significant shifts in the crypto market.