In addition to Trump's victory, the cryptocurrency market recently received another significant piece of news: the Federal Reserve cut rates by 25 basis points. Bitcoin's price is typically very sensitive to U.S. news and has reached close to the historical record of $77,000, remaining relatively stable.
The Federal Reserve is loosening monetary policy.
In line with market expectations, following actions by other central banks to implement loose monetary policies, the Federal Reserve lowered the benchmark federal funds rate by 25 basis points to 4.5%-4.75% on Thursday. Bitcoin surged to a historic high of $76,700 amid market expectations for the interest rate decision.
This rate cut was made after Donald Trump won the election, consistent with his previous advocacy for lowering rates to stimulate economic growth.
Although Trump has no direct control over the Federal Reserve's policies, interest rate cuts align with his economic agenda and campaign promises, and he often pushes for significant rate cuts.
This rate cut breaks a years-long pause and is the second rate cut in four years.
The press release stated, 'Since earlier this year, the labor market conditions have generally eased, and the unemployment rate has risen, but remains at a low level. Inflation has made progress towards the committee's 2% target but remains at a high level.'
Earlier today, the Bank of England lowered rates by 25 basis points, and the Swedish central bank reduced the key rate by half a percentage point. After the FOMC made its decision, Bitcoin's price hovered around $76,718, reaching a historical high, up 1.8% in the past 24 hours.
Will the Federal Reserve keep interest rates unchanged?
Investors are closely watching how Federal Reserve Chair Jerome Powell will discuss the future direction of the Fed after Donald Trump's decisive victory in the election. The elected president's planned policies, including tax cuts, tariffs, and deregulation focused on promoting economic growth, could stimulate economic growth. Inflation, however, may lead the Fed to take a more cautious stance.
This could lead to a slowdown, halt, or even reversal of recent rate cuts. Market sentiment has also changed accordingly; according to the CME FedWatch tool, the probability of the Fed maintaining current rates at the December meeting is 35%, up from 14% a month ago.
Recent news has been very positive for Bitcoin, as it recorded strong gains in November. Donald Trump took the lead in the election earlier this week, and Bitcoin's price soared, surpassing the historic high set in March, as signs indicate he may return to the White House.
Currently, Bitcoin is up 8% for the week and over 22% for the past month. The market capitalization of Bitcoin has now exceeded $1.5 trillion, making it the ninth largest financial asset in the world.
