- The US Federal Reserve cut its benchmark rate by 50 basis points to 4.75%-5%
- Bitcoin hit $63k after the Fed Reserv cut
- Analysts say that the lower interest rates had already been accounted for in the cost of riskier assets, such as Bitcoin
On September 19, 2024, the price of the world’s number one cryptocurrency, Bitcoin, hit a three-week high of $63,000, just as the United States Federal Reserve cut its benchmark rate by 50 basis points to 4.75%-5%.
At the time of writing, BTC was trading at $63,189, up 6.22% in the past day. Market cap was at $1.2 trillion, up 6.25%, while the volume of trade in the past 24 hours increased by 58.80% to $51.7 billion, according to data from Coinmarket cap. The crypto market has seen some bull run in the past 24 hours. The global market cap is $2.18T, a 6.19% increase over the last day. The total market volume over the last 24 hours is $103.49 billion, which makes a 53.66% increase.
BTC price in the past day. Source: Coinmarketcap
Why is Bitcoin trading higher?
Bitcoin's performance has been good in the past day because of the US Federal Reserve's rate cut. The Fed’s benchmark cut rate by 50 basis points to 4.75%-5% on September 18, 2024, ended what experts described as an “aggressive” rate-increasing cycle that has been prevalent for the past 12 months.
The last time the Fed reduced its benchmark interest rate by significant points was in early 2020 when the COVID-19 pandemic nearly crippled the global economy.
Analysts say that the lower interest rates had already been accounted for in the cost of riskier assets, such as Bitcoin. Though he was speaking with a long-term view, experts like Arthur Hayes have contended that the U.S. Federal Reserve's actions could ultimately hurt the market. On the other hand, the price of Bitcoin has benefited from the short-term response.
While Bitcoin reacted positively to the rate cut, its price had already risen from $57,600 to $60,000 before the official announcement. In the hours following the Fed's announcement, the price of Bitcoin saw several ups and downs, indicative of significant volatility for the cryptocurrency.
The Fed's decision was well welcomed by traders. Byzantine General, a popular trader who is very active on social media, described spot markets as “strong.” On the other hand, crypto analyst Michaël van de Poppe described BTC/USD as “doing great.”
“I assume we’ll consolidate before we continue to go up, but essentially, since Powell has been speaking, markets are going up. Nothing more. Just plenty of room to buy the dips,” van de Poppe posted on X.
How crypto scammers stole $55 million from trader via phishing
Meanwhile, TheRadar earlier reported that a crypto trader has lost $55.47 million in DAI stablecoin to fraudsters via a phishing attack. This is according to the blockchain security platform Scam Sniffer.
In a post on X, the anti-scam firm said the trader lost the asset after they misappropriatedly transferred ownership of their collateralized debt position (CDP) on DeFi Saver Proxy—a proxy contract created by the DAI stablecoin's issuer to help traders manage their collateralized debt positions (CDPs)—to a malicious wallet.
