The combined crypto market cap is up by 4.25% to $1.09 trillion on the back of the dovish stance of the United States Federal Reserve on interest rates. At the conclusion of its 2-day policy meeting, the apex bank unveiled a 25 basis points interest rate cut as it chooses to relax its aggressive fight against inflation.
This stance has sent the price of risk assets to new daily highs. Bitcoin (BTC), the industry’s premier digital currency is up by 3.55% to $23,902.59. This growth trend has positioned Bitcoin as one of the high performers in the Year-to-Date (YTD) period as showcased in its 39% drop year to date.
Ethereum (ETH) has an even higher rate of gain than Bitcoin, climbing by 6.53% over the past 24 hours according to data from CoinMarketCap. At its current price of $1,681.67, the Ethereum price is down by just 65.61% from its All-Time High (ATH) of $4,891.70
Other high-growth digital currencies including Aptos (APT) and Polygon (MATIC) are also redefining the current bullish market momentum. While the former is up by 11.06%, MATIC is up by 13.18% within the same time frame.
Impact of the Reduced Interest Rate on Bitcoin Price
Though the stance of the Federal Reserve with respect to the reduction in the interest rate was predicted by market analysts, however, this does not make its influence any less resounding. With a lower interest rate, investors can pump extra capital or money into the economy, a move that helps devalues the US Dollar.
With investors considering Bitcoin and crypto as a store of value, many may join the likes of MicroStrategy Incorporated and Tesla Inc to start acquiring the cryptocurrency. In the long run, this may prove to be beneficial to all Bitcoin holders.
Though there is still scary high inflation in the US and around the world, the monetary easing from the Federal Reserve is a show of faith to let the economy heal. With the spate of bankruptcies rocking the digital currency ecosystem, chances are that the current growth in the price of Bitcoin and its accompanying altcoins may mark the beginning of a whole new bullish era.
