Fed rate cut pushes bitcoin to $61 thousand
Kyiv • UNN
The price of bitcoin reached $61,985 after the Fed cut its interest rate by 50 basis points. The broader cryptocurrency market also rose, but further growth is limited due to cautious economic forecasts.
After the Federal Reserve cut interest rates, the price of bitcoin rose to $61,985, briefly reaching $62,539. However, further growth was limited due to more cautious market forecasts for US economic stability. UNN writes about this with reference to Investing.
Details
The price of bitcoin rose on Thursday after the Federal Reserve cut interest rates significantly and signaled the beginning of a cycle of easing. However, further growth was restrained due to less optimistic forecasts.
The world's largest cryptocurrency rose by 2.9% to $61,985, having briefly reached $62,539. Bitcoin also broke out of the $50,000-$60,000 trading range it had been in for most of the year, but it remains to be seen whether this breakout will be sustained.
The broader cryptocurrency markets also rose after the Fed's decision, although a stronger dollar limited the overall gains.
Bitcoin grew in response to a general rise in risky asset prices, as markets welcomed the Fed's 50 basis point rate cut and the start of the first cycle of easing since 2020.
However, the market's enthusiasm waned due to concerns about the weakness of the US economy, according to the Fed. The 50 basis point cut was close to the upper end of market expectations.
Fed Chairman Jerome Powell tried to reassure the market by saying that the risks between higher inflation and a cooling labor market are balanced. However, he also noted that rates will not be cut to extremely low levels as before and that the neutral rate will be higher than in past cycles. This forecast boosted the dollar.
Although lower rates usually support speculative assets such as bitcoin, it is unlikely to reach the lows seen during the pandemic. Ultra-low rates were a key factor in the rapid growth of cryptocurrencies in 2021.
Since then, however, the industry has faced tough regulatory measures and declining retail interest. The launch of spot bitcoin exchange-traded funds earlier this year provided only a short-term boost.
Cryptocurrency prices today: altcoins are growing along with bitcoin
The broader cryptocurrency market benefited from improved risk sentiment and rose alongside bitcoin. Ether, the second-largest cryptocurrency, climbed 3.9% to $2,412.52, while XRP, SOL, ADA, and MATIC tokens rose 0.4% to 5.7%.
Among meme tokens, DOGE grew by 3.3%.
Recall
Yesterday, the price of bitcoin rose amid expectations that the US Federal Reserve would cut interest rates, as well as positive data on the growth of capital flows into spot exchange-traded funds, which supported market sentiment.
