Bitcoin Surges Past $61,000

Bitcoin (BTC) surged past $61,000 following Fed Chair Jerome Powell’s optimistic remarks on U.S. inflation, indicating a potential shift towards lower interest rates.

“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell stated at the Jackson Hole symposium.

After Powell’s speech at the central bankers’ conference in Wyoming, the global cryptocurrency market capitalization rose to $2.28 trillion, a 0.6% increase in 24 hours, according to CoinGecko.

Stock Market Reaction

In response to Powell’s dovish comments, stock markets also rose. The Dow Jones Industrial Average increased by 417 points (1%), the S&P 500 gained 1.2%, and the Nasdaq Composite advanced 1.8%, with technology stocks leading the gainers in early New York trading.

Rate Cut Probabilities

Based on the CME FedWatch tool, there is a 67.5% probability of a 25 basis point cut and a 32.5% chance of a 50 basis point cut in the federal funds rate during next month’s meeting.

Jag Kooner, Head of Derivatives at Bitfinex, remarked that Powell’s speech was a significant indicator for the upcoming Federal Open Market Committee (FOMC) meeting on September 18. He suggested that investors would closely monitor Powell’s interpretation of recent data and any indications regarding the scale and timing of future rate cuts. Kooner noted that broader economic indicators, such as GDP and jobless claims, show that the economy is not as dire as during the 2009 recession.