*Why Is the Crypto Market Rising Today?*đ
Recent developments, such as the U.S. Federal Reserveâs recent 50 basis point rate cut and the Bank of Japanâs stable interest rates decision, have given the crypto market a fillip.
On Sept. 18, the Federal Reserve announced a 0.5% point cut in its benchmark interest rate, marking the U.S. central bankâs first rate cut in four years. The rate cut announcement moderately boosted the total market capitalization of cryptocurrencies by approximately 4%, reaching $2.1 trillion as of Sept. 18, 2024. As of Sept. 26, the total cryptocurrency market capitalization is $2.24 trillion, up by approximately 6.67%.
The rate cut generally refers to a reduction in the federal interest rate. It lowers borrowing costs, supports employment, stimulates economic growth, and raises stock prices. It also impacts the crypto world: It increases liquidity and risk appetite, as investors might seek higher returns and invest in digital assets like cryptocurrencies and positive market sentiment.
Crypto Marketsâ Spectacular Performance
As of Sept. 26, 2024, Bitcoin is trading at $63,728; it has risen by 2.73% in the last seven days. The crypto marketâs bounce back picked up momentum after the S&P 500 hit a new all-time high at levels 5,700+, highly influenced by the possibility of a 50 basis point interest rate cut.
Due to the anticipation of the U.S. Fedâs rate cut, as of Sept. 17, the total crypto market capitalization had risen by approximately 4%, reaching $2.1 trillion. The rise in market cap includes gains from Bitcoin, which has increased by around 8.03%, and Ether, which has risen by approximately 0.92%.
The surge in the crypto market can be attributed to several factors driving renewed investor optimism and heightened interest in digital assets. Despite facing challenges in 2023 due to global economic conditions, the market has demonstrated resilience and has bounced back strongly. While inflation didnât directly impact the previous slump, other macroeconomic factors played a significant role.
