Fed Rate Cut Expectations Boost Bitcoin to One-Month High
Fed Rate Cut Expectations Boost Bitcoin to One-Month HighBitcoin surged to its largest intraday gain in over a month on Tuesday, fueled by expectations of a rate cut by the Federal Reserve, boosting demand for speculative assets. Bitcoin jumped as much as 6
Fed Rate Cut Expectations Boost Bitcoin to One-Month High
Bitcoin surged to its largest intraday gain in over a month on Tuesday, fueled by expectations of a rate cut by the Federal Reserve, boosting demand for speculative assets. Bitcoin jumped as much as 6.4% to $61,337, its biggest intraday gain since August 8. Smaller cryptocurrencies like Ethereum, Dogecoin, and Solana also climbed.
Swap markets priced in a Fed rate cut of at least 25 basis points on Wednesday, with a 55% probability of a 50-basis point cut. The market broadly expects a rate cut to lift risk appetite, benefiting speculative assets like Bitcoin.
"I think the increasing correlation between crypto and traditional markets recently" is driving Bitcoin higher, said Shiliang Tang, president of ArbelosMarkets. He pointed to the Fed rate cut expectations as one of the key drivers of Bitcoin's rally.
Tang also noted that MicroStrategy Inc.'s announcement on Monday to issue convertible notes to buy more Bitcoin boosted sentiment in the cryptocurrency market. MicroStrategy, one of the largest Bitcoin holders globally, has consistently invested in Bitcoin, demonstrating its confidence in the cryptocurrency and providing support for its price.
Bitcoin has underperformed in recent months, falling after reaching a peak earlier this year. However, recent expectations of a Fed rate cut and continued institutional investment from entities like MicroStrategy have provided new momentum for Bitcoin.
However, some analysts cautioned that Bitcoin remains highly volatile and investors should proceed cautiously. Despite the positive sentiment driven by Fed rate cut expectations, uncertainty remains about the global economic outlook, which could impact Bitcoin's future trajectory.
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