Bitcoin’s price surged past $62,000 following the Federal Reserve’s announcement of a rate cut, the first in four years. Market analysts are predicting a potential surge towards a new all-time high, fueled by the increased liquidity and investor confidence.
“There’s a significant chance we could see a price pump during the remainder of the year, potentially even pushing Bitcoin towards another all-time high,” said Alice Liu, lead researcher at CoinMarketCap. She highlighted Bitcoin’s historical performance, noting a 90% rally in the fourth quarter over the past decade.
The Fed’s decision to cut interest rates by 0.5%, bringing them to a range between 4.75% and 5%, was driven by a strong US economy and declining inflation, according to Fed Chair Jerome Powell. This move is expected to boost the economy and encourage investors to seek out riskier assets like cryptocurrencies.
“Bitcoin is highly correlated to the liquidity environment, and this should support higher Bitcoin prices into the end of the year and beyond,” said Steven Lubka, head of Swan Private at Swan Bitcoin.
The broader crypto market responded positively to the news, with the total market capitalization exceeding $2.2 trillion. Ethereum jumped 5.2% to $2,435, while Solana saw a 6.4% increase to $138.
However, analysts caution that the upcoming election could pose a significant risk to the rally. The race between former President Donald Trump and Vice President Kamala Harris could have a major impact on the crypto industry’s regulatory landscape.
Bernstein analysts predict a potential Bitcoin price of $90,000 if Trump wins, while a Harris victory could see the cryptocurrency fall to $30,000.
“While elections may create regulatory headwinds, monetary policy is providing tailwinds, making Bitcoin the most likely winner,” said Greg Magadini, director of Derivatives at Amberdata.
