ey points:
Bitcoin climbs above $116,000
Fed expected to lower rates
Ether, Solana, Dogecoin on the move
Crypto takes no days off. Saturday morning prices crossed $116,000 as impatient traders bid up ahead of the Federal Reserve’s interest rate decision. Here’s what you can expect.
💸 Bitcoin Jumps Ahead of Rate Meeting
Bitcoin prices
BTCUSD
got a lift Saturday, pushing past the $116,000 handle in early-morning trading as crypto bros were getting excited about the prospects of next week. And namely, one key event.
It’s Fed week next week and Jay Powell is getting ready to make or break your portfolio… indirectly (nothing personal). The man who moves markets with a simple “Good afternoon” will take the podium on Wednesday to say whether the Fed has decided to lower interest rates.
And that’s what’s keeping the prices of Bitcoin well bid. With a few days until the big event, Bitcoin maxis are betting that Powell will trim borrowing costs by 25 basis points. Some go even higher, saying they expect a jumbo-sized 50-basis-point cut.
🔥 Bitcoin and Lower Rates
In the buildup to that decision, Bitcoin is looking to book its fourth day of gains, adding a total of 5% to its valuation, from around $110,000 to current market prices. Why is Bitcoin soaking up fresh cash to its market cap?
Lower rates typically benefit risk assets. And what’s riskier than a digital currency that’s relatively heavy at a $2.3 trillion valuation? Bitcoin benefits from more affordable cash because people tend to favor spending when it costs them less to pay it back.
And where is that more affordable cash going? Liquidity (hopefully you’re not exit liquidity). More liquid markets are a primary consequence of lower borrowing costs. This is also why tech stocks tend to do better in a low-rate environment.
