Bitcoin surges over 2% as US Fed cuts interest rate by 0.5%

Bitcoin Price: Bitcoin rose 2.6 percent, trading at USD 62,120 after the US Fed announced rate cuts in over four years.

The Federal Reserve has reduced interest rates for the first time since the early days of the COVID-19 pandemic, sending ripples through the cryptocurrency market. Bitcoin, the leading cryptocurrency, saw an uptick of about 3 percent in its value following the announcement on September 19, 2024.

Bitcoin price record

As of 9.08 am on September 19, Bitcoin was trading in the green, up 2.63 percent at USD 62,120.22, per Coinmarketcap.com. This movement aligns with typical investor behaviour, where lower interest rates push demand for higher-risk assets. Despite this recent boost, Bitcoin has remained relatively stable since reaching its all-time high of nearly USD 74,000 in March.

The move is expected to have far-reaching effects on the economy, as it influences the rates at which banks extend loans to both individuals and businesses. The decision is expected to affect borrowing costs for consumers, including home mortgages and credit card debt.

This rate cut also signals a shift from the Fed's recent strategy of maintaining elevated interest rates to curb inflation. The central bank has been nearing its long-term inflation goal of 2 percent.

Market reactions to Bitcoin price

Karim Dandashy, an over-the-counter trader at Flowdesk US, commented, “Knee jerk reaction higher as the market gets some relief after weeks of flip-flopping between 25 and 50 bps,” as quoted by Bloomberg.

Spencer Hallarn, global head of over-the-counter trading at crypto investment firm GSR, said, "It could signal in theory that the Fed is cutting 50 because they are worried about something. If they think we are on the brink of recession, then maybe feel more urgent to cut quickly,” as quoted by Bloomberg.

Bitcoin Market Cap is at a current level of 1.863T, up from 1.833T yesterday and up from 839.02B one year ago. This is a change of 1.63% from yesterday and 122.1% from one year ago.

The price of bitcoin has slid lower in recent weeks, erasing the gains that took the crypto to six-figure territory in December. The coin is now down 1% for the month, but is on track to end 2024 with a 116% gain.

Bitcoin price today: The world's largest cryptocurrency, Bitcoin, briefly declined below the psychological $1,05,000 level today, May 30, before recovering, data on CoinMarketCap showed.

At the time of writing, Bitcoin's price was at $105,795.12, down 1.90 per cent compared to the previous day and 3.8 per cent from the recent all-time high of $1,10,000.