Bitcoin jumps near $61,000, then pulls back after Fed rate cut

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Bitcoin (BTC) saw a sharp rise, approaching $61,000 shortly after the Federal Reserve (Fed) cut US interest rates by 0.5%, its first cut in 4 years. However, it quickly pared its gains amid volatile trading.

Bitcoin is now trading at around $60,500, up 1.5% in the last hour, according to data from CoinGecko. The biggest crypto asset was slightly lower at the Wall Street open today as the crypto market awaits the Fed’s interest rate decision and its implications for the economy.

Ethereum (ETH) also rose 1% to around $2,300 after the rate cut announcement. Other major crypto-assets, including Binance Coin (BNB), Solana (SOL), Ripple (XRP), and Toncoin (TON), followed suit, posting sharp gains.

Historical data shows that Bitcoin crashed by 30% after the Fed announced an interest rate cut in March 2020. However, the price started to rise towards the end of the year. By the end of 2020, BTC reached a record high of $61,300.

The rate cut decision came as a major boost to the crypto market, which had been struggling with volatility and bearish sentiment in recent months. Lower interest rates reduce the opportunity cost of holding riskier assets such as crypto assets, making them more attractive to investors.

Additionally, the Fed’s move hints at a potential easing of economic conditions, which could benefit the broader financial markets and indirectly support the crypto sector.

However, the aggressive rate cut could also be seen as a response to weakening economic conditions, which may lead to short-term declines in crypto prices.

The crypto market cap currently stands at $2.15 trillion, down 3% in the last 24 hours.

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