Sep 19 2024: Bitcoin’s price surged on Thursday after the Federal Reserve implemented a significant interest rate cut, signaling the start of an easing cycle. However, further gains were limited due to a less dovish outlook from the central bank.
The world’s largest cryptocurrency rose by 2.9%, reaching $61,985 by 01:41 ET (05:41 GMT), and briefly peaked at $62,539.8. This marked a breakout from the $50,000 to $60,000 trading range that Bitcoin had been in for much of the year, though it remains uncertain if the price surge will be sustained. While lower interest rates typically benefit high-risk assets like cryptocurrencies, rates are unlikely to reach the lows seen during the COVID-19 pandemic, which fueled Bitcoin’s 2021 bull run.
The cryptocurrency market continues to face challenges, including regulatory crackdowns and waning interest from retail investors. Even the launch of spot Bitcoin exchange-traded funds earlier this year provided only a temporary boost.
Altcoins Track Bitcoin’s Rise as Crypto Market Benefits from Fed’s Rate Cut
Broader cryptocurrency markets also saw gains, with altcoins rising alongside Bitcoin due to improved risk sentiment.
Ethereum, the second-largest cryptocurrency, gained 3.9% to $2,412.52, while XRP, SOL, ADA, and MATIC rose between 0.4% and 5.7%. Meme token Dogecoin (DOGE) increased by 3.3%.
Despite the rate cut, a strong U.S. dollar limited overall gains across the cryptocurrency market.
Bitcoin’s Gains Capped by Fed’s Moderated Outlook
Bitcoin’s upward movement followed a broader rise in risk-sensitive assets, as markets welcomed the Federal Reserve’s 50 basis point rate cut, marking the beginning of its first easing cycle since 2020.
However, the optimism was tempered by concerns about the Fed’s perception of the U.S. economy’s fragility, especially with the rate cut being at the upper end of market expectations.
Fed Chair Jerome Powell sought to address these concerns, stating that the risks of higher inflation and a cooling labor market were now balanced. He also emphasized that the Fed does not plan to cut rates to the ultra-low levels seen in the past, signaling that the central bank’s neutral rate will be higher in the medium-to-long term.Bitcoin’s price surged on Thursday after the Federal Reserve implemented a significant interest rate cut, signaling the start of an easing cycle. However, further gains were limited due to a less dovish outlook from the central bank.
The world’s largest cryptocurrency rose by 2.9%, reaching $61,985 by 01:41 ET (05:41 GMT), and briefly peaked at $62,539.8. This marked a breakout from the $50,000 to $60,000 trading range that Bitcoin had been in for much of the year, though it remains uncertain if the price surge will be sustained. While lower interest rates typically benefit high-risk assets like cryptocurrencies, rates are unlikely to reach the lows seen during the COVID-19 pandemic, which fueled Bitcoin’s 2021 bull run.
The cryptocurrency market continues to face challenges, including regulatory crackdowns and waning interest from retail investors. Even the launch of spot Bitcoin exchange-traded funds earlier this year provided only a temporary boost.
Altcoins Track Bitcoin’s Rise as Crypto Market Benefits from Fed’s Rate Cut
Broader cryptocurrency markets also saw gains, with altcoins rising alongside Bitcoin due to improved risk sentiment.
Ethereum, the second-largest cryptocurrency, gained 3.9% to $2,412.52, while XRP, SOL, ADA, and MATIC rose between 0.4% and 5.7%. Meme token Dogecoin (DOGE) increased by 3.3%.
Despite the rate cut, a strong U.S. dollar limited overall gains across the cryptocurrency market.
Bitcoin’s Gains Capped by Fed’s Moderated Outlook
Bitcoin’s upward movement followed a broader rise in risk-sensitive assets, as markets welcomed the Federal Reserve’s 50 basis point rate cut, marking the beginning of its first easing cycle since 2020.
However, the optimism was tempered by concerns about the Fed’s perception of the U.S. economy’s fragility, especially with the rate cut being at the upper end of market expectations.
Fed Chair Jerome Powell sought to address these concerns, stating that the risks of higher inflation and a cooling labor market were now balanced. He also emphasized that the Fed does not plan to cut rates to the ultra-low levels seen in the past, signaling that the central bank’s neutral rate will be higher in the medium-to-long term.
