Bitcoin regained the $60,000 mark on Tuesday, as investors awaited further details on the Federal Reserve’s anticipated rate-cutting plans.
The flagship cryptocurrency’s price increased by 4.3%, reaching $60,394.41, according to Coin Metrics. At one point, it peaked at $61,335.83. The initial surge occurred on Monday night following former President Donald Trump’s announcement of his new crypto venture, World Financial Liberty Coin.
On Tuesday morning, Bitcoin crossed the $60,000 threshold as the Federal Reserve commenced its two-day policy meeting. The central bank is expected to lower interest rates for the first time in four years, a move likely to boost risk assets, including Bitcoin.
Philipp Pieper, co-founder of Swarm Markets, commented, “Bitcoin is likely to react to the news of a Fed rate cut with some retrenchment as the short-term market dynamics filter out. However, the longer-term implications of easing monetary conditions lend themselves to a fresh bull cycle for Bitcoin, Ether, and the rest of the market. Historically, Bitcoin has shown some correlation to major tech indices like the Nasdaq and broadly moves in line with monetary conditions, as investors seek yield in lower-rate environments.”
The market is currently divided on whether the Fed will reduce rates by 25 or 50 basis points. Traders are pricing in a 63% chance that the central bank will ease rates by 50 basis points, according to CME Group’s FedWatch Tool. One basis point is equivalent to 0.01%.
Bitcoin has been fluctuating between $55,000 and $70,000 this year. Investors are anticipating the Federal Reserve’s rate cuts, the growth of Bitcoin ETFs, and the outcome of the U.S. presidential election as key factors that could impact the crypto market.
