Bitcoin has surged to $60,000, supported by expectations of a Federal Reserve rate cut next week. Bitcoin’s rise comes as markets brace for a 25-50 basis point rate cut, a move that many believe could boost the value of bitcoin and riskier investments.
Earlier this summer, Federal Reserve Chairman Jerome Powell hinted that a rate cut could come as early as September. Speaking on June 12, Powell indicated that the central bank would consider cutting rates once it was confident that inflation was moving back toward its 2% target. This week’s announcement that U.S. inflation had fallen to 2.5%, below expectations, paved the way for such a move.
The Federal Reserve is scheduled to announce its decision next Wednesday, September 18, at the next meeting of the Federal Open Market Committee. A rate cut could provide additional momentum to Bitcoin, which has already risen more than 125% over the past year.
Just yesterday, the European Central Bank cut its key interest rate by 0.25 percentage points, following the Bank of Canada’s decision to cut its key interest rate by 25 basis points last week.