Bitcoin’s price rose to over $62,000 after Federal Reserve Chair Jerome Powell announced that the central bank will cut interest rates for the first time in four years.
Now, market watchers say that the world’s leading cryptocurrency’s price will skyrocket.
“There’s a significant chance that we could see a price pump during the remainder of the year, potentially even pushing Bitcoin towards another all-time high,” Alice Liu, lead researcher at CoinMarketCap told DL News.
She added that Bitcoin has rallied some 90% in the fourth quarter of the year over the past decade.
Bitcoin bursting through its previous $73,000 record will likely catapult the rest of the $2.2 trillion crypto industry. But analysts caution that uncertainty around the election still risks kneecapping the rally.
Fed cuts
The US’ central bank will cut interest rates by 0.5%, bringing them to a range between 4.75% and 5%, chair Powell announced on Wednesday.
“The US economy is in good shape. It is growing at a solid pace. Inflation is coming down,” he said.
The total crypto market rallied 2% to just over $2.2 trillion on the news. Ethereum jumped 5.2% to $2,435. over the past 24 hours, and Solana jumped 6.4% to $138.
When interest rates come down, borrowing becomes cheaper, which energises the economy and nudges investors to buy riskier assets like stocks and crypto.
“Bitcoin is highly correlated to the liquidity environment, and this should support higher Bitcoin prices into the end of the year and beyond,” said Steven Lubka, head of Swan Private at Swan Bitcoin.
Election uncertainty
Several factors risk toppling the rally before it gains momentum. Among them: The upcoming election.
The race between former President Donald Trump and Vice President Kamala Harris will pit one candidate that has publicly backed the industry against one that hasn’t made her views on crypto known.
Bernstein analysts estimate that a Trump win will drive Bitcoin as high as $90,000 this year, while his loss would see the cryptocurrency fall as low as $30,000.
“While elections may create regulatory headwinds, monetary policy is providing tailwinds, making Bitcoin the most likely winner,” said Greg Magadini, director of Derivatives at Amberdata.
Crypto market movers
Bitcoin jumped3.7% over the past 24 hours and trades at $62,172.
Ethereum rose 5.2% to $2,435.
What we’ are reading
Demand for Solana’s unreleased phone is so hot orders have already hit $70m — DL News
Fed Cuts Interest Rates By 50 Basis Points, Bitcoin Surges — Milk Road
Fed Rate Cut Should Spur Crypto Investors to Load up on Memecoins, Asymmetric Founder Tells Token2049 — Unchained
Sky Rebrands With New DApp And Tokens, Live Now — Milk Road
Mashinsky’s trial has been delayed — here’s when the Celsius CEO trial starts — DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
