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Cryptocurrency News Articles
Bitcoin Price Spikes 5% to $61K Ahead of FOMC Meeting as Fed Poised to Cut US Interest Rates
Sep 18, 2024 at 07:33 pm
Tech Report is one of the oldest hardware, news, and tech review sites on the internet. We write helpful technology guides, unbiased product reviews, and report on the latest tech and crypto news.
Tech Report is one of the oldest hardware, news, and tech review sites on the net. We maintain editorial independence and consider content quality and factual accuracy to be non-negotiable. We write helpful technology guides, unbiased product reviews, and report on the latest tech and crypto news.
The Federal Reserve System (Fed) is poised to cut US interest rates by either 25 or 50 basis points (bps) during today’s Federal Open Market Committee (FOMC) meeting.
Coinciding with the event, Bitcoin’s ($BTC) price has soared by 5% to $61K, uplifting other major cryptocurrencies.
$BTC ETFs also attracted $250M in investments on Monday, two days before the Fed’s final decision.
However, investors must remain cautious: Binance’s BTC-USDT order book shows high sell-offs.
Ahead of today’s FOMC meeting (20:00 CET), where the Fed is poised to cut US interest rates by either 25 or 50 bps, Bitcoin’s price has spiked by ~5% to $61K.
$ETH, $SOL, $XRP, $ADA, and $AVEX also rallied by 2% to 4% over the past 24-hours. When BTC climbs, other cryptos follow.
It’s evident macroeconomic news impacts the crypto industry. Let’s peel back the layers to find out more.
$BTC’s Fear & Greed Index Sways Like the Fed’s Anticipated Decision
Over the last month, it was anticipated that the Fed would cut interest rates by 25 bps today. However, there’s currently a 65% likelihood the Fed will opt for a more impactful 50 bps.
If the Fed cuts interest rates by 25 bps instead of 50 bps, US citizens won’t be able to borrow as much money. Therefore, the economy will grow at a slower pace.
Bitcoin’s Fear & Greed Index mirrors the uncertainty surrounding the Fed’s decision, swinging back and forth between ‘Neutral’ and ‘Fear’ this past week. But, considering it hit the ‘Extreme Fear’ zone just ten days ago, it’s still a victory.
Notably, the Crypto Fear and Greed Index often reflects significant world events. In March 2020, its value plummeted to its lowest point following panic over Covid. Both DeFi and TradFi markets experienced notable sell-offs.
In contrast, the US finally cutting its interest rates for the first time in four years might give the crypto industry a much-needed boost.
Lowering the cost of borrowing capital will make it easier and cheaper for American citizens and businesses to borrow money. With more cash in hand, it’s highly possible they’ll start investing in riskier assets, like crypto.
Investors Pour $250M into $BTC ETFs Ahead of US Interest Rate Cut
Further indicating a solid appetite for crypto ahead of the Fed’s highly anticipated ruling is Bitcoin $ETFs attracting $250M in investments on Monday alone.
Prominent asset managers (including Fidelity, BlackRock, and Grayscale) launched SEC-approved $BTC ETFs in January, enabling entities and individuals to buy shares that reflect Bitcoin’s current value.
At first, they were in high demand and attracted billions in investor funds. However, interest soon waned – uncertainties regarding the Fed’s interest rate cuts are thought to have played a significant part.
On September 3, $BTC ETFs experienced their third-biggest loss post-launch, shredding over $287.7M. Fidelity’s $FBTC witnessed the most considerable loss ($162.3M).
However, since the news broke out about the Fed potentially raising US interest rates to 50 bps, $BTC ETF interest has rebounded.
But Like All Good Things, There’s a Catch
Alongside the Fed possibly slashing US interest rates by 50 bps, BTC and other major cryptocurrencies have made a slight comeback.
However, amidst the excitement in both the TradFi and DeFi realms, Binance’s BTC-USDT order book (the most liquid trading pair by volume) shows sell-offs between $61K and $62.5K.
Despite not wanting to burst the bubble, investors must remain cautious. Cryptocurrency resistance levels are often highly tested during significant macroeconomic events.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.
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