In the midst of the positive news that the US Federal Reserve has announced a 25bp rate cut, Bit coin has set a new all-time high. Federal Reserve Chairman Jerome Powell clearly stated that the election results will not affect the planned future rate cuts.
The magnitude of this cut is smaller than in September. However, it is still seen as a positive signal in the Bit coin and cryptocurrency markets.
Powell's Rate Cut Policy
On Thursday, the US Federal Reserve announced a 25bp downward adjustment of the benchmark interest rate to the 4.5% to 4.75% range. Chairman Jerome Powell had previously indicated that he would gradually lower interest rates over the next few months. The previous rate cut in September was seen as a very positive signal for the cryptocurrency industry.
Read more: Bit coin (BTC) Price Prediction 2024/2025/2030
Bit coin prices have already hit new all-time highs following Donald Trump's election victory. This new rate cut can further stimulate positive sentiment. In fact, on Thursday, Bit coin reached another new all-time high of $76,800. At the time of writing, the price has dropped slightly to around $75,800.
When the news of the rate cut first broke, general commentators reacted with absolute delight. Crypto Rover, the founder of the Crypto Sea analysis platform, argued that the previous rate cut trend alone could push Bit coin up to $100,000.
Even in September, analysts warned that market volatility could harm risky assets like Bit coin.
Liquidity provider and asset exchange Darkex Global expressed concern that Trump's victory could impede or destabilize future rate cuts. However, Chairman Powell drew a line.
"The election will not affect our policy decisions. The economy is very difficult to forecast beyond the short term. We do not speculate, infer, or assume." – Jerome Powell, Federal Reserve Chairman
Read more: How to Protect Yourself from Inflation Using Cryptocurrency
In other words, in the current political environment, the Fed does not yet see a reason to slow or halt the rate cuts. Chairman Powell emphasized the long-term goal of gradually reducing US inflation and maintaining high employment. If this gradual rate cut is satisfying the Fed, the President-elect Trump will also not interfere with it.
