After the Fed Cut Interest Rates, Bitcoin Surpassed $62,000

As has been announced multiple times in recent days, all financial markets, especially crypto, were focused on last night’s meeting of the American central bank as it was expected that the Fed would lower interest rates for the first time in almost four years. Once this came to fruition, the markets responded with enormous price volatility.

Many believed that the rate cut was already priced in for risky assets like Bitcoin. Others, like Arthur Hayes, determined that such actions by the American Fed would cripple the market. His words were actually from a long-term perspective, but in the short term, it was quite positive for the price of Bitcoin.

The largest cryptocurrency had already jumped from 57,600 to 60,000 dollars the day before the meeting, and after the Fed cut its interest rates by 50 basis points, or half a percentage point, Bitcoin continued to rise but also fell several times. Just 12 hours after the long-awaited meeting, the price of Bitcoin reached nearly 3.3 percent higher than before the meeting and increased by eight percent on a weekly basis.

Today, the most well-known cryptocurrency reached a three-week high of around 62,500 dollars. Most altcoins followed Bitcoin’s example, and the total market capitalization of the crypto market increased by about 100 billion dollars overnight.

Liquidations reached 200 million dollars on a daily basis, with short positions representing a larger share. Of course, Bitcoin led with 75 million dollars in liquidated positions, while Ethereum followed with 35 million dollars. Even precious metals faced increased volatility after the rate cut, moving from 2,550 dollars to a new all-time high of 2,600 dollars per ounce.

The American stock market followed with initial gains but later recorded a slight decline. The S&P 500 opened the trading day at 5,641, jumped to nearly 5,680, but closed at 5,618. The movement of the Nasdaq Composite was similar, from 17,663 to over 17,800 and fell to 17,573 by the end of the day. The Dow Jones Industrial Average was relatively less volatile but still ended the day with a slight loss.

Although it is still early to draw major conclusions, the developments in the first 12 hours show that riskier assets like cryptocurrencies have benefited from the Fed’s rate cut so far. However, time will tell whether this will indeed prove to be a ‘bullish’ move.