Bitcoin (BTCUSD) Jumps Over $63,000 Following a Federal Reserve Interest-Rate Cut
- 王林Original
- 2024-09-20 03:25:08735browse
The price of Bitcoin (BTCUSD) jumped over $63,000 Thursday following a Federal Reserve interest-rate cut. The Fed's yearslong fight against inflation saw rates rise to a 23-year high. Wednesday's cut, the first of this cycle, boosted investor confidence in bitcoin, driving prices higher.
Bitcoin (BTCUSD) price soared past $63,000 on Thursday following a Federal Reserve interest-rate cut.
The Fed's years-long battle against inflation saw rates rise to a 23-year high. But Wednesday's cut, the first of this cycle, boosted investor appetite for bitcoin, driving prices higher.
The Fed cutting rates "may be a welcome development for bitcoin bulls," said FXTM Senior Market Analyst Lukman Otunuga, adding that a signal of looser financial conditions can boost the appetite for riskier assets such as cryptocurrencies.
Bitcoin's price rose in the immediate aftermath of the Fed announcement and continued its upward trajectory in recent trading.
MicroStrategy (MSTR) stock, which is closely tied to bitcoin's performance, surged 11% on Thursday. The company announced plans on Wednesday for a $700 million debt offering to add more bitcoins to its coffers.
Other beneficiaries of bitcoin's recent price rise included crypto exchange Coinbase (COIN), which was up 6% on Thursday, and bitcoin miner Marathon (MARA), which saw its shares gain more than 4%.
Grayscale Head of Research Zach Pandl pointed out that the Fed's decision to cut rates came despite inflation risks remaining somewhat elevated.
"Central banks’ willingness to take risks with inflation tends to drive investors to store-of-value assets, like gold and Bitcoin," said Pandl, adding that despite choppy markets immediately after the announcement, "over time bitcoin will benefit from lower rates and a weaker dollar."
A negative economic outlook from the Fed could lead to a bitcoin reversal even in cases where rates are cut further, Otunuga said.
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