As a seasoned crypto investor with a decade of experience under my belt, I can confidently say that the recent surge in Bitcoin and Ethereum prices is nothing short of exhilarating. The Fed’s decision to cut interest rates yet again has ignited a bullish fire beneath the market, and I find myself riding this wave of green candles with a mix of excitement and cautious optimism.
The top digital currency, Bitcoin (BTC), reached a fresh record peak of $76,800, boosted by the latest U.S. presidential election results, with Donald Trump maintaining his position in the White House, and a more accommodating monetary stance from the Federal Reserve (Fed).
Fed’s Second Consecutive Rate Cut
On Thursdays, the Federal Reserve revealed they would lower their primary borrowing rate by 0.25% (or 25 basis points), setting the new range at 4.50% – 4.75%. This move seems to have boosted optimism in the crypto market.
At this gathering, the Federal Reserve reduced interest rates for the second time in a row, mirroring a 0.5% decrease that occurred in September. The decision, which saw Governor Michelle Bowman among those voting, indicates a change in the Fed’s strategy, focusing more on balancing inflation management with labor market assistance.
After their latest meeting, the Federal Open Market Committee (FOMC) updated their perspective on economic uncertainties. Now, they view the likelihood of reaching their objectives for employment and inflation as roughly equal, marking a shift away from the overly positive outlook expressed in the previous statement.
As a researcher delving into the fascinating world of cryptocurrencies, I’ve recently observed a significant surge in both stock and crypto markets. This trend, I posit, is a preemptive response to the anticipated rate cut by the Federal Reserve. Looking ahead, if we see further rate cuts over the coming quarters, it seems plausible that this could fuel continued price growth for both traditional stocks and digital currencies.
Positive Trends For Bitcoin And Ethereum Post-Election
During a special conversation with NewsBTC, Aurelie Barthere – a key researcher at Nansen – pointed out that Bitcoin surpassing its prior record peak, along with increased trading activity, suggests a robust, optimistic trend within the market.
During the pre-election phase, the analyst spotted a trend of reducing risk (or “de-risking”) possibly due to poor poll results for Trump. However, after the election outcome, there was a surge in taking on risk again (or “re-risking”), as confidence increased, which was further supported by the upward movement in prices.
As an analyst, I too notice that the Republican win in the House of Representatives might intensify this stock market rally. Yet, I must add a word of caution: In the upcoming weeks, there could be profit-taking as new policies are implemented, especially with regards to speculations about the US SEC chair potentially resigning under political pressure.
The analyst noted that there’s growing interest in Ethereum, especially since the anticipation for a comeback of decentralized finance (DeFi) is increasing.
On the day of the election results, Barthere observed a notable increase in the ETH/BTC value ratio and substantial investments worth $52 million flowing into Ethereum-based exchange-traded funds (ETFs).
The analyst is implying that the ongoing investments into the newly established cryptocurrency ETF market signal a growing retail enthusiasm towards the second largest digital coin. She further anticipates that this currency has not yet experienced widespread use.
Currently, when I’m typing this, Bitcoin is being exchanged at approximately $76,629, representing almost a 10% increase within the last week. Similarly, Ether (ETH) has also experienced substantial growth, increasing by around 14% in the same time frame to attain its current price of $2,885.
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2024-11-08 01:34