Bitcoin Surges Amid Federal Reserve Rate Cut Speculation

Bitcoin saw its largest intraday gain in over a month on Tuesday, driven by growing expectations that the Federal Reserve may soon reduce interest rates.

The cryptocurrency surged as much as 6.4%, reaching $61,337, marking its most significant increase since August 8. Other cryptocurrencies, including Ethereum, Dogecoin, and Solana, also experienced upward momentum.

The pricing in the swap markets indicates that the Federal Reserve is expected to lower interest rates by at least 25 basis points during its Wednesday meeting, with a 55% chance of a 50-basis-point reduction. This potential shift in monetary policy has reignited interest in speculative assets like Bitcoin.

“I believe the increasing correlation between cryptocurrencies and traditional markets is currently fueling Bitcoin’s rise,” said Shiliang Tang, president of Arbelos Markets. Tang further noted that the recent announcement by MicroStrategy Inc. to issue convertible notes for the purchase of additional Bitcoin has bolstered sentiment in the cryptocurrency market.