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Bitcoin experienced a notable increase after the Federal Reserve lowered borrowing rates for the first time since the onset of the COVID-19 pandemic over four years ago. This move has helped cryptocurrencies gain mainstream traction. NSE The US central bank reduced its benchmark interest rate by half a percentage point, with projections from the two-day meeting indicating that a slight majority—10 out of 19 officials—support lowering rates by at least another half-point in the remaining meetings of 2024.
In response, Bitcoin rose approximately 1% to reach $60,778. Typically, lower interest rates stimulate demand for riskier assets, prompting this upward movement. "There was a knee-jerk reaction higher as the market finds some relief after weeks of uncertainty between 25 and 50 basis points," commented Karim Dandashy, an over-the-counter trader at Flowdesk.
Since hitting a record high of nearly $74,000 in March, Bitcoin has been trading within a relatively tight range. Hedge fund manager Anthony Scaramucci expressed optimism in an interview earlier Wednesday, predicting that Bitcoin could achieve new record highs, driven by the interest rate cut and increasing regulatory clarity surrounding the crypto industry in the US. Also read: US Fed Rate Cut: Dollar Index plunges to 14-month low.
