Bitcoin has gained momentum, climbing above $60,000 as investors await the Fed’s decision on interest rate cuts. The world’s largest cryptocurrency is trading up 4.3% at $60,399, according to Coin Metrics, and its price once reached as high as $61,335.
The rally began Monday night after former President Donald Trump announced his new crypto initiative, the World Financial Liberty Coin, initially boosting Bitcoin’s price. But the market’s main focus remains on the Federal Reserve’s two-day policy meeting, which is expected to result in the first rate cut in four years.
If the Fed cuts interest rates, it is likely to support riskier assets like Bitcoin, as looser monetary conditions will make speculative assets more attractive to investors.
“Bitcoin will likely react to the Fed rate cut news with some pullback as short-term market dynamics filter through,” said Philipp Pieper, co-founder of Swarm Markets. “However, the longer-term effects of easing monetary conditions are contributing to a new bull cycle for Bitcoin, Ethereum, and the rest of the market. Historically, Bitcoin has shown some correlation with major tech indices like the Nasdaq and has generally moved in tandem with monetary conditions as investors seek yield in low-interest-rate environments.”
Market participants are divided on whether the Fed will cut rates by 25 or 50 basis points. There is currently a 63% chance the central bank will implement the larger 50 basis point cut, according to CME Group’s FedWatch tool.
*This is not investment advice.
