Bitcoin Hits New All-Time High Amid Fed’s 25bps Rate Cut
The US Federal Reserve announced a 25 basis points (bps) interest rate cut, a bullish signal, while Bitcoin crossed a new all-time high. Fed Chair Jerome Powell directly stated that election results will not impact future planned rate cuts.
These cuts are lower than the previous September round. However, they are still considered bullish for Bitcoin and the broader crypto market.
Bitcoin and Powell’s Rate Cut Regime
On Thursday, the US Federal Reserve announced new interest rate cuts of 25 basis points (bps). This translates to a target range between 4.5% and 4.75% and is consistent with Fed Chair Jerome Powell’s stated plans to gradually cut rates in the coming months. Previous rate cuts in September proved a highly bullish signal for the crypto industry.
Bitcoin’s price already reached a new all-time high since Donald Trump’s election victory, but this new rate cut may turbocharge bullish sentiment. Indeed, on Thursday, Bitcoin made yet another new all-time high at $76,800. However, as of writing, Bitcoin has slightly retraced, currently trading at $75,800.
When the news first broke onto the crypto scene, general commentators reacted with absolute jubilation. Crypto Rover, founder of CryptoSea analysis platform, claimed that previous rate cut trends alone could take Bitcoin to $100,000.
Even bearish predictions have hinged on the notion that rate cuts would be too conservative. In September, analysts warned that perceived market instability could harm risk-on assets like Bitcoin.
Darkex Global, liquidity provider and asset exchange, theorized that Trump’s victory might dampen future rate cuts or create such instability. Fed Chair Jerome Powell addressed this.
“The election will have no impact on our policy decisions. The economy is very difficult to forecast looking past the near term. We don’t guess, we don’t speculate, and we don’t assume,” Powell stated.
In other words, nothing in the current political climate has yet convinced the Fed that rate cuts should slow or cease. Powell emphasized his long-term goal of steadily reducing US inflation and keeping employment high. If this current trajectory of gradual slow rate cuts is working to the Fed’s satisfaction, Trump’s election will not hinder it.
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