Altcoins outperformed Bitcoin and Ether after the Federal Reserve announced a rate cut on Wednesday, CoinDesk reported. Since the announcement, cryptocurrencies other than Ether and Bitcoin have risen 5.7%, while Bitcoin has only risen 4.4%.

Bob Wallden, head of trading at investment firm Abra, said the discrepancy is not uncommon because altcoins have less liquidity and higher volatility. The Total3 index shows that the market capitalization of the top 125 cryptocurrencies has risen by 5.68%, while Bitcoin's market capitalization has risen by only 4.4%.

Wallden explained that altcoins are similar to how tech stocks outperformed the S&P 500 when the market rebounded. The low liquidity of altcoins leads to greater volatility, especially when liquidity is plentiful.

Bohan Jiang, head of OTC options trading at Abra, added that the poor liquidity of altcoins causes them to outperform when risk assets perform well. The accumulation of short positions in the past few months may also cause altcoins to show a short squeeze-like rally.

The Fed’s rate cut decision pushed Bitcoin prices above $64,000 on Thursday, the highest since August 26. The price has since fallen back and is currently trading at $62,898.