Bitcoin’s price has seen a 1.55% pump over the past hour. At publication, BTC is trading at $60,480.58. This price rise has happened because of major economic developments in the United States.
Crypto analyst “WatcherGuru” broke this big news to his 2.4 million followers on X this evening. He said the U.S. Federal Reserve cuts interest rates by 50bps for the first time in 4 years.
BREAKING: Federal Reserve cuts interest rates by 50bps for the first time in 4 years.
— Watcher.Guru (@WatcherGuru) September 18, 2024
This change makes it cheaper for investors to borrow money, and this has caused the financial markets to feel more optimistic now that the Fed has slashed rates. The cryptocurrency market has responded swiftly to this news, given that borrowing rates are expected to reduce.
However, its monetary policy has undergone a compelling shift following years of rate increases meant to fight inflation. At the Federal Open Market Committee (FOMC) meeting in September, this decision was confirmed. It is anticipated that this will reduce borrowing costs and promote economic expansion.
This move taken by the Federal Reserve comes after years of aggressive rate hikes, which saw 11 increases in two years and brought interest rates to their highest point in 23 years.
Furthermore, the Fed thinks this is the time to change direction because inflation has decreased from 9.1% in 2022 to 2.5% according to the latest Consumer Price Index (CPI) statistics. As expected, the rate reductions might last until 2025.
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Show more +Show less – Bitcoin Sees Inflow Amid Rate Cuts
LookonChain on X, who has 448.6k followers, shared that Bitcoin saw a strong inflow of investment. The analyst said a net flow of 2,695 BTC ($161.29 million) was reported across 10 Bitcoin ETFs. Fidelity alone contributed 940 BTC ($56.24 million), bringing its total holdings to 175,865 BTC, valued at $10.52 billion.
Moreover, this solid influx of capital into Bitcoin ETFs suggests continued confidence in the cryptocurrency market.
Image Source: X/LookonChain
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Ethereum Faces Outflows as Bitcoin Strengthens
While Bitcoin enjoyed a positive flow of funds, Ethereum struggled. The analysis said the total net outflow of nine Ethereum ETFs was 4,973 ETH ($11.46 million).
Finally, he added that substantial withdrawals were made from Grayscale’s Ethereum Trust as it saw a drop of 6,199 ETH, bringing its total holdings to 1,732,011 ETH, which is worth $3.99 billion.
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