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How the Fed's Rate Cut Catalyzed Bitcoin's Surge Past $117,000
2025-09-18 12:29:11
Markets
Economy

How the Fed's Rate Cut Catalyzed Bitcoin's Surge Past $117,000

The recent Federal Reserve interest rate cut has significantly influenced market dynamics, particularly in the cryptocurrency sector. Following the Fed's decision to lower rates by 25 basis points, Bitcoin surged past $117,000, lifting overall market sentiment.

This rate cut, aimed at addressing rising unemployment, has weakened the US dollar and invigorated equity markets, leading to increased trading volumes and open interest in Bitcoin derivatives. Traders now eye the critical $118,000 level, believing that reclaiming it as support could propel Bitcoin to new all-time highs.

However, some analysts note a moderate impact on investor enthusiasm, hinting at uncertainty regarding future Fed policies. As search interest for Fed rate cuts peaks, expectations grow that this environment will flood the market with cash, particularly into yield-bearing stablecoins and decentralized finance products.

The potential for increased funding through private investment in Bitcoin treasury firms adds to the optimism surrounding a prolonged bull run in the cryptocurrency market.

Related news on that topic:

Federal Reserve Cuts Interest Rates Amid Labor Market and ... Inflation Concerns

The recent decision by the Federal Open Market Committee to cut the Federal Funds Rate by 0.25% marks a pivotal moment in U.S. economic policy. This move, anticipated by economists and traders, is primarily driven by concerns over the labor market's fragility and rising inflation pressures exacerbated by tariff policies. As the first rate cut in nearly a year, this decision sets the new target interest rate range between 4% and 4.25%. Federal Reserve Chair Jerome Powell has emphasized the unusual economic environment, highlighting the dual challenges of supporting employment while managing inflation. This rate cut aims to lower short-term borrowing costs, potentially boosting economic activities and asset prices, including cryptocurrencies like Bitcoin and altcoins. However, the decision was not without controversy, facing internal dissent and external political pressure from figures such as President Donald Trump. The financial markets have responded with mixed reactions, with some investors remaining bullish on the potential for a broader risk rally. At the same time, concerns about the Federal Reserve's independence and future economic stability persist. As the year progresses, further rate adjustments may be necessary, reflecting ongoing assessments of economic indicators and market conditions.

How the Fed's Rate Cut Signals Shifts in Economic Strategy

The recent decision by the US Federal Reserve to lower interest rates for the first time this year reflects growing concerns over the labor market. The reduction by 25 basis points, bringing the rate to a range of 4.0% to 4.25%, was largely supported by Fed officials, although a divide remains on future cuts. The Fed's action aims to stimulate economic activity amid slower job growth and rising unemployment projections. While some officials project no further reductions this year, the central bank's outlook signals potential declines in interest rates through 2028. This environment has sparked speculation among investors, particularly in the crypto market, where rate cuts are often seen as favorable for riskier assets. However, caution persists as the Fed grapples with inflationary pressures and external political influences. In parallel, HSBC has responded to the Fed's move by cutting its prime lending rate, providing relief to borrowers in Hong Kong. Overall, the Fed's latest actions highlight the balancing act between fostering economic growth and managing inflationary risks in an uncertain economic landscape.

Read 3 more recent news on this topic

The press radar on this topic:

The Street
18. September 2025 um 23:53

Fed rate cuts could trigger cash flood into yield-bearing stablecoins

The Federal Reserve's expected rate cut is set to influence cash flow into the crypto industry, with experts predicting a 'cash flood' into yield-bearing stablecoins and decentralized finance (DeFi) products. According to Kevin Rusher, founder of RAAC, the magnitude of the rate cut is less important than the trillions of dollars in liquidity it will unlock, including mortgages and money market funds. This could trigger a surge in demand for yield-generating investments, such as stablecoins like..
The Street
18. September 2025 um 23:52

Fed rate cut searches hit record high as Bitcoin, XRP slip ahead of decision

US search interest for 'Fed rate cut' reached a record high on Google Trends, with top sub-regions including Washington, Massachusetts, and DC. Despite the hype, Bitcoin, Ethereum, and XRP traded slightly lower ahead of the Federal Reserve's policy announcement. CryptoQuant analyst maartunn attributed the recent bounce in Bitcoin to outflows from Binance, which may reflect early positioning for a rate cut. Analyst Tom Lee predicts a broader risk rally with crypto at the center if the Fed cuts..
The Street
18. September 2025 um 23:52

Bitcoin treasuries could tap PIPE and convertibles if Fed slashes rates today

The crypto community is waiting for the Federal Reserve's interest rate decision, with traders expecting a 90% chance of at least a 25 basis point cut. If rates are slashed, Bitcoin treasury firms may see increased funding through private investment in public equity (PIPE) and convertible debt, according to Alexander Blume, CEO of Two Prime. This would be a positive development for Bitcoin, as investors bet on a long bull run.
Crypto.news
18. September 2025 um 06:36

Bitcoin price rallies above $117K as first 2025 Fed rate cut boosts sentiment

The Bitcoin price surged above $117,000 after the Federal Reserve's first interest rate cut of the year, boosting sentiment across risk assets. The Fed voted 11-1 to lower the federal funds rate by 25 basis points, citing rising unemployment as a concern over inflation risks. This move weakened the US dollar and lifted equities, pushing crypto markets higher. Trading volume and open interest in derivatives markets also surged, indicating renewed participation and potential for higher volatility.
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