Crypto stocks rally after Fed interest rate cut By Investing.com

Cryptocurrency stocks rose today as part of a broader market rally, a day after the Federal Reserve delivered a blistering rate cut and promised more as inflation eases.

The first interest rate cut in more than four years sparked a rush to riskier assets and helped propel the sector to decent gains in 2024.

() rose as investors shifted portfolios amid expectations that the U.S. rate will fall another half percentage point by the end of 2024.

While the dominant cryptocurrency initially rose before retreating as traders digested the news, the coin has since regained its strength.

Actions related to the digital asset ecosystem followed suit. America’s Largest Cryptocurrency Exchange, Coinbase Global Inc (NASDAQ: ), rose 4.1%. MicroStrategy (NASDAQ: ), the world’s largest corporate bitcoin holder, rose 5%.

Cryptominers Riot Platforms (NASDAQ: ), Marathon Digital (NASDAQ: ) and CleanSpark Inc (NASDAQ: ) saw its shares rise 5%, 5.8%, and 6.1%, respectively.

Bitcoin, known for acting as both a hedge and a risk asset, is currently more correlated with traditional safe-haven assets such as gold.

With money market funds now yielding 50 basis points less, investors are apparently betting that this low-interest environment could boost liquidity in the crypto sector. Others, however, focused on concerns that the size of the rate cut could signal greater-than-expected economic concerns.

Earlier this year, the approval of exchange-traded funds that track the spot prices of bitcoin and ether boosted investor sentiment in the crypto industry. However, market conditions have become more volatile in recent weeks as investors weighed political developments ahead of the 2024 US presidential election.

Republican nominee Donald Trump is explicitly backing bitcoin adoption, vowing to fire SEC Chairman Gary Gensler if elected, a move favored by the crypto industry, which has often criticized Gensler’s enforcement policies.

Trump launched a new crypto venture earlier this week and made headlines yesterday by paying for burgers with bitcoin during a campaign stop in New York.