Bitcoin Spikes Above $61,000 as Fed Implements 50 Bps Rate Cut
By Benzinga
In a significant market move, Bitcoin (CRYPTO: BTC) surged past the $61,000 mark after the U.S. Federal Reserve announced a 50 basis point (bps) cut in interest rates, bringing the federal funds rate down to a range of 4.75% to 5%.
What Happened: This sharp rise marked a critical point for Bitcoin, which crossed the $61,000 threshold before settling back at $60,400, a modest 0.9% decline from its high.
Ethereum (CRYPTO: ETH), following a similar pattern, hit a high of $2,363 before retracting to $2,335. Both cryptocurrencies saw notable activity following the Federal Reserve's surprise decision, which exceeded the anticipated 25 bps cut and ended a 12-month period of consistent rates.
The larger-than-expected cut has sparked optimism in risk asset markets, including cryptocurrencies.
In a note sent to Benzinga, Hashdex's CIO Samir Kerbage said, “In the near term, we anticipate Bitcoin will respond favorably to today's decision, even as rate cuts were widely expected,” Kerbage noted.
Also Read: Michael Saylor: Bitcoin To Hit $13M By 2045, ‘Will Get Us To A Different Place'
He highlighted the interplay of macroeconomic factors, such as geopolitical tensions and upcoming election uncertainties, that also influence Bitcoin’s trajectory. However, he remains confident about the broader outlook.
“These markets should benefit from the formalization of the Fed's dovish shift. Our long-term investment thesis for Bitcoin remains intact, and regardless of the near-term direction of monetary policy, BTC is well-positioned for growth as institutional adoption continues to gain momentum.”
The Fed's rate cut, its first in over four years, surprised many on Wall Street.
Analysts had largely anticipated a 25 bps reduction, but the more aggressive 50 bps cut signaled a bolder approach to easing monetary conditions, in line with investor expectations for faster relief amid economic uncertainty.
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