Fed Chairman Jerome Powell said Friday that “the time has come for Fed policy to adjust”, suggesting interest rate cuts are finally on the horizon. The Fed’s dovish signal helped the Bitcoin (BTC) price to return above the $63,000 mark as the crypto market extended its recovery from the rout at the start of this month.
BTC Surges On News Of Potential Fed Rate Cut In September
The price of Bitcoin tapped new local highs Friday as investors reacted warmly to confirmation by Fed Chair Powell that U.S. inflation is on a sustainable path and that the central bank may start lowering interest rates.
“The time has come for Fed policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he posited while delivering a speech at Jackson Hole Economic Policy Symposium in Wyoming.
In the immediate aftermath of the keynote address at the central bankers’s conference, Bitcoin rose 5.7% to $63,616 as of publication time. The price of Ether (ETH) and Solana (SOL) had jumped 5.3% and 4.6%, respectively, to $2,743.72 and $149.83.
The global market cap now hovers at $2.32 trillion, reflecting a 3.7% increase in the last 24 hours, as per CoinGecko data.
As of this writing, there is now a 67% chance of a 25 basis point cut and a 32% probability of a 50 basis point cut in interest rates at the Fed’s September meeting, according to the CME FedWatch tool.
‘Up Only Time’ For Crypto
The Fed has held its benchmark interest rate constant since July 2023 as it waited for clear signs that inflation was slowing to its 2% target. That day of easier monetary policy has now arrived after months of waiting.
Responding to news that borrowing costs are headed lower, crypto industry experts were in a bullish mood.
“Powell goes full dove,” trader and podcast host Scott Melker (aka the Wolf of All Streets), observed in a post on the X platform alongside Powell’s statements.
The long-anticipated liquidity easing has been widely touted as a key bullish tailwind for BTC along with the massive institutional inflows from the newly-launched spot exchange-traded funds (ETFs).
Billionaire and former BitMEX CEO Arthur Hayes declared, “Up only time for crypto.”
