Bitcoin surged to an all-time high on Sunday over $106,000 as investors continued in high anticipation of an interest-rate reduction by the Federal Reserve this week.
In particular, the cryptocurrency broke a 4% margin upwards to $105,207. It even briefly touched an apex at $106,509. Ethereum also rose in an analogous manner to just short of the $4,000 range. The entire market rallied similarly, with CoinDesk's 20 gaining its way up by about 4%.
CNBC reported that the excitement of the recent Bitcoin rally is reportedly connected with expectations that the Federal Reserve will cut interest rates during its two-day policy meeting scheduled to close on Wednesday. The market tools predict a 96% chance that the Fed would cut the rate by 0.25%. It can help to strengthen Bitcoin's price. According to most analysts, lower interest rates are favorable for Bitcoin as it often moves similarly to the tech stocks that often thrive under cheaper borrowing costs.
Fed Interest Rates Impact on Bitcoin
On a historical basis, when the Fed cuts interest rates, this weakens the US dollar and increases the money supply. Both of which have been good for Bitcoin prices. This is happening as the Nasdaq Composite, a tech company stock index, is also up by 0.3%, which happens to be better than how most other major stock market indexes performed.
So far, Bitcoin is seeing steady growth in the last few months. It is up almost 8% for the month, 50% since the US presidential election, and 145% for the year, up from 130%, as per VCPost.
The optimism of investors partly stems from the possibility of friendlier regulations with the forthcoming Trump administration and rumors over a national strategic Bitcoin reserve.
Looking ahead, Bitcoin continues to surge upward and investors are optimistic that the future will be bright. Most are hoping that this will be the Fed's way of furthering the momentum for the cryptocurrency in the coming weeks.
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