In a dramatic market shift, Bitcoin (BTC/USD) surged past the $61,000 mark after the U.S. Federal Reserve announced a surprise 50 basis point (bps) interest rate cut, bringing the federal funds rate down to a range of 4.75% to 5%. This marked a significant turning point for the cryptocurrency, which had been under pressure in recent months.
This sharp rise in Bitcoin’s price was fueled by the Fed’s unexpected move, exceeding the anticipated 25 bps cut and ending a 12-month period of consistent rate hikes. The larger-than-expected cut injected optimism into risk asset markets, including cryptocurrencies. Ethereum (ETH/USD), mirroring Bitcoin’s trajectory, reached a high of $2,363 before retracting slightly.
Samir Kerbage, a prominent figure in the digital asset space, weighed in on the implications of the Fed’s decision for the crypto sector. “In the near term, we anticipate Bitcoin will respond favorably to today’s decision, even as rate cuts were widely expected,” Kerbage noted.
Kerbage also highlighted the interplay of macroeconomic factors, including geopolitical tensions and upcoming election uncertainties, which continue to influence Bitcoin’s direction. However, he remains bullish about the long-term outlook for Bitcoin. “These markets should benefit from the formalization of the Fed’s dovish shift. Our long-term investment thesis for Bitcoin remains intact, and regardless of the near-term direction of monetary policy, BTC is well-positioned for growth as institutional adoption continues to gain momentum.”
The Fed’s rate cut, its first in over four years, took many on Wall Street by surprise. Analysts had primarily anticipated a 25 bps reduction. The more aggressive 50 bps cut signaled a bolder approach to easing monetary conditions, aligning with investor expectations for faster relief amid economic uncertainty.
