Bitcoin price surges above $61,000 as speculation grows over Fed rate cut

Bitcoin experienced a significant surge, climbing by nearly 6% to surpass the $61,000 mark, although this momentum waned in anticipation of the Federal Reserve’s upcoming interest rate decision on September 18. This rise marked the end of a brief three-day decline where Bitcoin had slipped from its recent two-week peak before bouncing back. The latest rally has pushed the world’s most valuable cryptocurrency back above a critical psychological threshold.

At the time of reporting, BTC was trading at $60,935, reflecting a 5.5% increase over the past 24 hours according to data from CryptoSlate. The broader crypto market also displayed signs of recovery, with an addition of over $45 billion to its total value, led by Bitcoin and Ethereum. However, the performance of the top 10 cryptocurrencies by market capitalization varied, indicating a cautious sentiment among investors.

Ethereum (ETH), the second-largest cryptocurrency, saw a 3.5% uptick in the last 24 hours, reaching a price of $2,369.38. BNB and Solana (SOL) also experienced gains of 2.43% and 1.45%, trading at $546 and $132.47 respectively at the time of reporting. XRP and Dogecoin (DOGE) showed approximately 2% growth, trading at $0.5857 and $0.1014, while Avalanche (AVAX) saw a 3.43% increase to trade at $24.2.

Toncoin (TON) recorded a modest 1.38% rise, reaching $5.50, while TRON (TRX) and Cardano (ADA) posted increases of 1.61% and 1.87%, trading at $0.1507 and $0.3371 respectively. Bitcoin’s surge coincided with a notable drop in US 10-year Treasury yields, which fell to their lowest level in 15 months. The consecutive decline in US yields has fueled speculation about a potential interest rate cut by the Federal Reserve.

Historically, lower Treasury yields have indicated a growing appetite among investors for riskier assets, including cryptocurrencies. The Fedwatch tool suggests increasing confidence in a 0.5% rate cut by the Federal Reserve, with the likelihood of such a move surging to nearly 70%. Conversely, a smaller 0.25% cut remains less likely, with market participants expecting the Fed’s decision to mark the beginning of a new phase of monetary easing.

This potential rate cut could provide further support for Bitcoin and other digital assets, as these assets often thrive when risk appetite is strong. Bitcoin’s market data at 6:14 pm UTC on September 17, 2024, showed a price of $60,822.23, reflecting a 5.51% increase over the past 24 hours. The total crypto market at that time was valued at $2.1 trillion with a 24-hour trading volume of $71.98 billion and a Bitcoin dominance of 57.25%.