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Bitcoin rises to $61.7k following Fed minutes suggesting potential rate reduction in September.
Bitcoin (BTC) has risen above $61,000 after a 3.5% increase in the last 24 hours, driven by the release of optimistic Fed minutes from the July meeting on Aug. 21.
Ethereum (ETH) experienced a 1.5% rise during the same timeframe, while Solana (SOL) saw a decline of 0.6% as of the time of reporting.
The summary of the minutes reinforces Fed Chairman Jerome Powell’s recent comments regarding a potential interest rate reduction if market data continues to align with expectations. The document states:
“The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.”
Importantly, the document also suggests a 25 basis points (bps) rate cut due to “recent progress on inflation” and “increases in the unemployment rate.” This would adjust the interest rate benchmark from 5.25% to 5%.
This news is favorable for cryptocurrencies and other risk assets, as the decline in bond yields enhances their appeal.
The stock market also responded positively to the Fed minutes, with the S&P 500, Nasdaq, and Dow Jones closing the day with gains of 0.42%, 0.57%, and 0.14%, respectively.
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Interestingly, the likelihood of a 25 bps cut decreased to 72% from 77% on Polymarket following the Fed minutes, while the probability of a 50 bps or greater cut increased to 22% from 18%.
US elections could potentially hold prices down
Despite the potentially bullish scenario in September, Bitfinex analysts contend that the most significant factor influencing crypto markets is the forthcoming US presidential elections.
The analysts state:
“As Democrat nominee Harris has seen an increase in odds of winning to almost equal Republican nominee, former President Trump’s odds, it induces uncertainty in markets, especially crypto.”
After dropping 10% below Vice President Kamala Harris’ chances of winning the election, former President Donald Trump’s odds rebounded to 52% on Polymarket and are now 5% ahead of the Democrat candidate, whose odds have decreased to 47%.
However, despite the uncertain election outcome, Bitfinex analysts believe that the market will recover if Trump’s odds have already reached their lowest point.
The post Bitcoin climbs to $61.7k as Fed minutes hint at rate cut in September appeared first on CryptoSlate.
