Bitcoin surged to a new all-time high on Sunday evening, with prices rising over 4% to reach $105,207.00. Earlier in the day, the cryptocurrency hit a record of $106,509. Ether also saw gains, climbing nearly 4% to approach the key $4,000 mark. The broader cryptocurrency market, represented by the CoinDesk 20 index, also experienced a 4% increase.
Market Context
This rally coincided with the tech-heavy Nasdaq Composite’s 0.3% gain at the end of the U.S. trading week, outperforming other major stock indexes. The prospect of a Federal Reserve interest rate cut, following their two-day policy meeting concluding Wednesday, boosts investor sentiment. The CME Fedwatch tool indicates a 96% probability of a 25-basis-point rate cut.
Historically, lower interest rates have favored Bitcoin, which often behaves like a tech stock. A rate cut typically signals a weakening dollar and an increase in the money supply, both of which have shown long-term correlations with Bitcoin’s price.
Performance Highlights
- Monthly Performance: Bitcoin is up nearly 8% for the month.
- Election Impact: Since the U.S. presidential election, Bitcoin has risen 50%.
- Year-to-Date Performance: The cryptocurrency has gained 145% in 2024.
The prospect of a more favorable regulatory environment and the potential establishment of a national strategic Bitcoin reserve under the incoming Donald Trump administration are additional positive catalysts for Bitcoin and the broader cryptocurrency market.
Market Reactions
Meanwhile, shares of crypto-related equities like Coinbase and MicroStrategy remained relatively unchanged in pre-market trading, despite MicroStrategy’s upcoming inclusion in the Nasdaq 100 stock index and the heavily traded QQQ ETF later this month.
As Bitcoin continues its upward trajectory, market participants are closely watching the Fed’s policy decisions and their implications for the cryptocurrency market.
