Bitcoin jumps 6% after Fed cuts rates by 50 basis points

Bitcoin is trading near $63,000, up 6% in the last 24 hours after the Federal Reserve’s decision to cut its benchmark interest rate by 50 basis points. This move has also lifted the overall crypto market, with the total market cap rising 2% in response.

The rate cut is viewed as favorable for hard assets like Bitcoin, which often benefit from inflationary pressures. However, the rate cut appears more reactive, addressing growing economic concerns. Despite this, the market’s response has been positive, signaling optimism among investors.

The Fed’s decision to lower rates by half a percentage point was seen as a preventive measure to address a potential slowdown in the labor market. While many investors had anticipated some level of easing, expectations were mixed, with some predicting a smaller 25-basis-point reduction.

Looking ahead, further cuts are expected, with the CME Group’s FedWatch Tool suggesting additional easing by the end of the year.

Although September is historically Bitcoin’s worst-performing month, it is up 7% this time around. However, caution remains as the market turns its focus to the Bank of Japan’s upcoming policy meeting, which could significantly influence Bitcoin’s future price.