Bitcoin Remains Flat After Fed Cuts Rates by 50 Basis Points, Market Reacts Tepidly

Bitcoin Remains Flat After Fed Cuts Rates by 50 Basis Points, Market Reacts TepidlyDespite the Federal Reserve cutting interest rates by 50 basis points for the first time in over four years, Bitcoin failed to rally, trading around the $60,000 mark.The Fed's rate cut was aimed at addressing risks of slowing economic growth

Bitcoin Remains Flat After Fed Cuts Rates by 50 Basis Points, Market Reacts Tepidly

Despite the Federal Reserve cutting interest rates by 50 basis points for the first time in over four years, Bitcoin failed to rally, trading around the $60,000 mark.

The Fed's rate cut was aimed at addressing risks of slowing economic growth. According to the post-meeting dot plot, 10 out of 19 officials favored at least another 50-basis-point cut at the final two rate meetings of the year. Lower rates typically help stimulate demand for higher-risk assets, such as Bitcoin.

Bitcoin initially rose about 2% after the Fed's rate cut announcement but quickly erased gains. Smaller tokens were mostly down. Analysts believe the muted response to the Fed's rate cut may be due to investors' continued caution about the economic outlook.

Theoretically it might indicate that the Fed cutting rates by 50 basis points is because they are concerned about something, said Spencer Hallarn, global head of over-the-counter trading at cryptocurrency investment firm GSR. If they think were on the brink of a recession, there would be an even greater urgency to cut rates aggressively.

Bitcoin has been trading in a relatively narrow range since hitting an all-time high near $74,000 in March. After weeks of going back and forth between 25 and 50 basis points, the market took a breather and knee-jerk reactions heightened, said Karim Dandashy, a FlowdeskUS OTC trader.

Hedge fund manager Anthony Scaramucci said in an interview earlier Wednesday that Bitcoin is likely to hit a new all-time high, driven by the Fed's rate cut and clarity on US cryptocurrency regulation. However, the current market reaction to the Fed's rate cut suggests that investors still have a wait-and-see attitude toward Bitcoin's future direction.

Overall, despite the Fed's rate cut being potentially bullish for the market, Bitcoin's failure to rally suggests the market is still cautious about the economic outlook. Bitcoin's future trajectory will depend on several factors, including economic data, policy changes, and market sentiment.