Bitcoin’s Price Surge After Fed’s Rate Cut

Bitcoin’s price jumped on Thursday after the Federal Reserve cut interest rates significantly, signaling an easing cycle.

The world’s largest cryptocurrency rose 4.7% to $62,947.0 by 09:05 ET (13:05 GMT), briefly hitting a high of $62,539.8. It broke out of the $50,000 to $60,000 trading range that had persisted throughout most of the year, although the sustainability of this breakout remains uncertain.

Broader Cryptocurrency Market Response

Following the Fed’s rate cut, broader cryptocurrency prices also increased, but strong dollar performance limited overall gains.

Optimism and Concerns

Bitcoin’s rise corresponded with a broader increase in risk-driven assets, driven by a 50 basis point rate cut by the Fed, marking its first easing cycle since 2020. However, concerns linger regarding the fragility of the U.S. economy, given that the cut was at the higher end of market expectations.

Fed Chair Jerome Powell reassured some worries by stating that risks from inflation and a softening labor market are now evenly balanced. However, he cautioned against expectations of cutting rates to ultra-low levels again, suggesting that the Fed’s neutral rate would be higher than in previous cycles, improving the dollar’s outlook.

Lower rates generally favor high-risk assets like crypto, yet they are now unlikely to reach the lows seen during the COVID-19 pandemic, which fueled a significant crypto bull run in 2021. The industry has been dealing with regulatory crackdowns and decreasing retail interest, with only temporary boosts from spot Bitcoin ETFs this year.

Altcoins Move in Response

The broader crypto market benefited from an increased risk appetite, with altcoins rising alongside Bitcoin.

• Ether (ETH) climbed over 5% to $2,435.44.
• Other cryptocurrencies, including XRP, SOL, ADA, and MATIC, rose between 2.5% and 7.8%.
• Among meme tokens, DOGE increased by 3.7%.

U.S. Elections and Crypto Regulations

The crypto market is closely monitoring the upcoming U.S. presidential election, anticipating its impact on blockchain and cryptocurrency regulation. As the largest economy, changes in U.S. policy often influence global markets.

However, Vishal Sacheendran, Head of Regional Markets at Binance, suggested during an interview at the Token2049 event that the November election’s outcome won’t significantly affect global digital asset regulations. He pointed out the decentralized nature of crypto regulations, stating, “Does the election impact how the Middle East, Latin America, and Southeast Asian countries treat crypto markets? They know what’s best for the country.”

Sacheendran emphasized the growing significance of progressive markets like Singapore, Thailand, Indonesia, and India in the Asian crypto landscape, where leaders and regulators are actively fostering the development of Web3 talent.

Ambar Warrick contributed to this report.