Bitcoin is trading above $60,000 as traders await announcements from the FOMC
The CoinDesk 20 (CD20), a measure of market performance, is up 1.1%
Bitcoin {{BTC}} held above $60,000 early Wednesday, after a brief tumble below the level in late U.S. hours, as traders around the globe await a U.S. Federal Open Market Committee (FOMC) meeting where chair Jerome Powell is widely expected to announce rate cuts.
BTC traded just over $60,300 at press time, up nearly 4% in the past 24 hours to extend weekly gains over 7%. Major tokens showed mixed movements, with ether {{ETH}}, BNB Chain’s BNB and dogecoin {{DOGE}} rising under 1% and xrp {{XRP}}, Cardano’s ADA and Toncoin (TON) showing slight losses.
The broad-based CoinDesk 20 (CD20), an index tracking the largest tokens, rose 1.1%.
The FOMC is expected to release its statement and interest rate decision at 2 p.m. Eastern Time later Wednesday. A pivot to lower borrowing costs has historically buoyed bullish sentiment among traders as cheap access to money spurts growth in riskier sectors.
Fed funds data shows traders pricing in a 67% chance of a cut that will bring rates in the 4.5%-5% range from the current two-decade high between 5.25% and 5.5%. A larger cut would see rates drop by half a percentage point, instead of the traditional quarter-point cut.
Traders on Polymarket are split between the possibility of a 100 basis points (bps) and 125 bps cut, giving both scenarios a 31% chance of happening.
However, some say a 50 bps cut could trigger a sell-off as it signals a worrying sign for the economy.
“The size of the rate cut matters because it could lead to different market reactions. While a 25 bps cut would likely boost markets, a 50 bps cut might signal recession concerns, potentially triggering a deeper correction in risk assets,” said Alice Liu, research lead at CoinMarketCap, in an email to CoinDesk.
"If the rate cut is seen as a response to weakening economic conditions, it could raise concerns about future earnings growth, potentially leading to a short-term pullback in BTC and other crypto assets,” Liu said, adding that Q4 could bring a shift toward more stability after the U.S. elections.
“Historically, Q4 has often been a strong period for Bitcoin, and on average BTC has yielded 90.33% price increase in Q4 for the past 10 years,” she noted.
Speaking to Bloomberg at the Token 2049 conference in Singapore, SkyBridge Capital founder Anthony Scaramucci predicts bitcoin will hit a record high on rate cuts and more clear rules in the U.S. around crypto. Scaramucci foresees the possibility of a 150 bps rate cut at the next Fed meeting.
Elsewhere in crypto, Sui is up over 7% based on continued positive market sentiment from USDC being launched on the platform as well as Circle enabling its Cross-Chain Transfer Protocol (CCTP), which allows for cross-chain flows on Sui.
Meanwhile, at Token 2049, Circle announced it had entered into an agreement with Polymarket to collaborate to further integrate Circle’s infrastructure into the prediction market platform, including CCTP.
