Bitcoin hit three-week highs near $63,500 amidst a stock market rally and a significant interest rate cut by the US Federal Reserve.
Bitcoin and Stock Market Rally
Data from Cointelegraph Markets Pro and TradingView captured Bitcoin hitting three-week highs close to $63,500 on Bitstamp. The rise followed a significant 0.5% interest rate cut by the Federal Reserve, signaling ongoing financial policy easing in the United States. The S&P 500 is approaching new all-time highs, and BTC/USD is also making strides toward its peak levels from March.
Fed Policy and its Impact
Bitcoin and other assets like equities and gold surged following the significant 0.5% interest rate cut by the US Federal Reserve. This event indicates a continuation of financial policy easing in the country. The US 2Y/10Y treasury spread, an indicator of recession, has been inverted since July 2022 but has recently steepened to +8bps, reflecting market optimism and a shift towards risk-on assets. Further rate cuts are anticipated from the Fed, with two expected before year-end.
Experts' Opinions
Trading firm QCP Capital noted the recent steepening of the treasury yield spread in its latest bulletin. The Kobeissi Letter highlighted a $3 trillion increase in market cap since September 6th. Noted trader and social media figure Byzantine General remarked on the strength of spot markets, while crypto trader, analyst, and entrepreneur Michaël van de Poppe commented on BTC/USD’s performance. '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 shared with his X followers.
Bitcoin and other assets continue to rise in response to the Fed's interest rate cut, indicating ongoing financial policy easing and market optimism.
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