Bitcoin (BTC), the leading cryptocurrency by market capitalization, surged to a new all-time high of $76,800 following the recent U.S. presidential election, witnessing Donald Trump secure another term in the White House and a more favorable monetary policy from the Federal Reserve.
Fed cuts interest rates for the second consecutive time
On Thursday, the Federal Reserve announced a decision to cut the benchmark overnight lending rate by 25 basis points to a target range of 4.50%-4.75%, contributing to the optimistic sentiment surrounding cryptocurrency prices.
This is the second consecutive interest rate cut, following a half-point reduction in September. The unanimous vote at this meeting, which included Governor Michelle Bowman, reflects a change in the Fed's approach to balancing inflation control with labor market support.
In a statement after the meeting, the Federal Open Market Committee (FOMC) noted a revised assessment of economic risks, indicating that the outlook for achieving the current employment and inflation targets is now considered balanced, in contrast to the more optimistic stance of the previous month.
Cryptocurrency analyst Doctor Profit commented on the recent increase in both the stock and cryptocurrency markets, suggesting that the price rise is due to expectations of Fed rate cuts. He predicts that continued rate cuts in the coming quarters could push stock and cryptocurrency prices even higher.
Positive trends for Bitcoin and Ethereum after the election
In an exclusive interview with NewsBTC, Nansen's lead research analyst, Aurelie Barthere, emphasized that Bitcoin's rise above previous all-time highs, along with high trading volume, signals strong positive momentum in the market.
The analyst noted a period of "risk reduction" ahead of the election, possibly due to the impact of unfavorable polling for Trump, but then saw a wave of "risk reallocation" as confidence returned after the election results, with clear evidence being rising prices.
Barthere also pointed out that the Republican victory in the House of Representatives could further amplify this bullish trend. However, she cautioned that profit-taking could occur in the coming weeks as new policies are tested, particularly regarding potential political pressure on the U.S. SEC chairman to resign.
The analyst points out that Ethereum is also attracting attention as expectations for a revival of decentralized finance (DeFi) are rising.
Barthere noted an interesting increase in the ETH/BTC price ratio, accompanied by a significant net inflow of $52 million into Ethereum exchange-traded funds (ETFs) on the day the election results were announced.
The analyst believes that the continued inflow of funds into this newly approved ETF market is seen as a sign of broader interest from retail investors in the second-largest cryptocurrency, which she believes has not yet been significantly adopted.
