Crypto Market Surges as Fed Cuts Interest Rates by 25 Basis Points Amid Election Aftermath
In a move that has boosted risk-on assets like Bitcoin, the Federal Reserve cut interest rates by 25 basis points, bringing the target range down to 4.5-4.75%. This adjustment, announced by the Federal Open Market Committee (FOMC) on November 7, comes shortly after Donald Trump’s recent election victory, adding fuel to an already bullish crypto market.
Bitcoin and other cryptocurrencies have responded positively to the rate cut, with Bitcoin climbing to a fresh all-time high of $76,700. The reduction in borrowing costs is seen as a potential catalyst for digital assets, which typically benefit from lower rates that encourage investment in alternative assets. Over the past 24 hours, Bitcoin has risen by 1%, while Ethereum has surged by over 7%, trading around $2,888.
The rate cut aligns with Trump’s economic policies, though the former president has no direct influence on the Fed’s decisions. His administration has repeatedly signaled a preference for lower rates to stimulate growth, a stance that resonates with market sentiment today.
Jerome Powell, Chair of the Federal Reserve, acknowledged that while inflation is on track toward the Fed’s 2% target, uncertainties remain. He pointed out that the labor market has slightly softened but remains strong overall. Powell emphasized the Fed’s data-driven approach, suggesting that future rate decisions will rely on incoming economic indicators.
The Fed’s rate cut, the second in recent months, has had a noticeable effect on traditional markets as well. The S&P 500 rose by 0.9%, while the Nasdaq saw a 1.6% increase, indicating that investors are broadly optimistic about the impact of lower rates on growth assets.
As the market processes the implications of the Fed’s decision, investors continue to watch closely for economic data and policy developments. The convergence of lower interest rates and political shifts suggests that Bitcoin and other cryptocurrencies could see sustained interest, with global economic events playing a pivotal role in shaping market trends.
