The world’s biggest cryptocurrency rose 4.7% to $62,947.0 by 09:05 ET (13:05 GMT), briefly rising as high as $62,539.8. The token also broke out of a $50,000 to $60,000 trading range seen through most of the year, although it remained to be seen whether the breakout could be maintained.
Broader cryptocurrency prices also rose after the Fed’s rate cut, although strength in the dollar limited overall gains.
The world’s largest cryptocurrency tracked a broader increase in risk-driven assets as markets cheered a 50 basis point cut by the Fed, as well as the beginning of the bank’s first easing cycle since 2020.
But this optimism was somewhat dampened by concerns over just how fragile the Fed thought the U.S. economy was, given that the 50 bps cut was at the upper end of market expectations.
Fed Chair Jerome Powell quelled some concerns over the economy, stating that risks between higher inflation and a cooling labor market were now evenly balanced.
But Powell also said that the Fed had no intention of cutting rates to ultra-low levels, and that the central bank’s neutral rate will be higher than past instances. His comments present a higher outlook for rates in the medium-to-long term.
This notion boosted the dollar.
While lower rates do bode well for high-risk, speculative assets such as crypto, they are now unlikely to hit lows seen during the COVID-19 pandemic. Ultra-low rates were a key driver of crypto’s 2021 bull run.
But the industry has since been grappling with a series of regulatory crackdowns, as well as dwindling retail interest. The launch of spot Bitcoin exchange-traded funds earlier this year provided only a fleeting boost.
Broader cryptocurrency prices benefited from improving risk appetite, and rose in tandem with Bitcoin.
World no.2 crypto Ether climbed more than 5% to $2,435.44, while XRP, SOL, ADA and MATIC up between 2.5% and 7.8%.
Among meme tokens, DOGE rose 3.7%.
The crypto market is paying close attention to the U.S. presidential election, with many expecting the outcome to have a major influence on blockchain and cryptocurrency regulation in the U.S., and by extension, on global markets. As the world’s largest economy, changes in U.S. policy are often felt across the broader crypto landscape.
However, Binance’s Head of Regional Markets, Vishal Sacheendran, voiced a different view during an interview with The Block at the Token2049 event. He suggested that the upcoming November election will not play a significant role in shaping global digital asset regulations.
“Crypto regulations are completely decentralized,” Sacheendran noted. “Does [the election] impact how the Middle East, Latin America, and Southeast Asian countries treat crypto markets? They know what’s best for the country.”
Sacheendran highlighted the growing importance of markets like Singapore, Thailand, Indonesia, and India in the Asian crypto scene. These countries have taken a more progressive approach, with leaders and regulators actively supporting the development of Web3 talent.
Ambar Warrick contributed to this report.
Source: Cryptocurrency - investing.com
