Bitcoin surges over 2% as US Fed cuts interest rate by 0.5% in first reduction since 2020

Bitcoin Price: Bitcoin rose 2.6 percent, trading at USD 62,120 after the US Fed announced rate cuts in over four years.

Shivangini
Published19 Sep 2024, 09:44 AM IST
Bitcoin surges over 2% as US Fed slashes lending rate by 0.5% in first cut since 2020
Bitcoin surges over 2% as US Fed slashes lending rate by 0.5% in first cut since 2020

Bitcoin News: The Federal Reserve has reduced interest rates for the first time since the early days of the COVID-19 pandemic, sending ripples through the cryptocurrency market. Bitcoin, the leading cryptocurrency, saw an uptick of about 3 percent in its value following the announcement on September 19, 2024.

Bitcoin price record

As of 9.08 am on September 19, Bitcoin was trading in the green, up 2.63 percent at USD 62,120.22, per Coinmarketcap.com. This movement aligns with typical investor behaviour, where lower interest rates push demand for higher-risk assets. Despite this recent boost, Bitcoin has remained relatively stable since reaching its all-time high of nearly USD 74,000 in March.

Federal Reserve's Rate cut

The Federal Reserve, on Wednesday, September 18, announced a 0.5 percentage point reduction in its benchmark interest rate, marking the US central bank's first rate cut in over four years. The decision comes just months before the November presidential election.

Also Read | Big rate cut forces US Fed to contend with new obstacles

The move is expected to have far-reaching effects on the economy, as it influences the rates at which banks extend loans to both individuals and businesses. The decision is expected to affect borrowing costs for consumers, including home mortgages and credit card debt.

Also Read | US Fed Meeting Live Updates: Powell-led FOMC slashes key interest rate by 50 bps

This rate cut also signals a shift from the Fed's recent strategy of maintaining elevated interest rates to curb inflation. The central bank has been nearing its long-term inflation goal of 2 percent.

Market reactions to Bitcoin price

Karim Dandashy, an over-the-counter trader at Flowdesk US, commented, “Knee jerk reaction higher as the market gets some relief after weeks of flip-flopping between 25 and 50 bps,” as quoted by Bloomberg.

Spencer Hallarn, global head of over-the-counter trading at crypto investment firm GSR, said, "It could signal in theory that the Fed is cutting 50 because they are worried about something. If they think we are on the brink of recession, then maybe feel more urgent to cut quickly,” as quoted by Bloomberg.

Also Read | Why the Federal Reserve has gambled on a big interest-rate cut

The cryptocurrency community remains optimistic about Bitcoin's future. Hedge fund manager Anthony Scaramucci said earlier on Wednesday that the rate cut, combined with increasing regulatory clarity in the US crypto industry, could propel Bitcoin to new record highs, Bloomberg reported. 

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:19 Sep 2024, 09:44 AM IST
Business NewsMarketsCryptocurrencyBitcoin surges over 2% as US Fed cuts interest rate by 0.5% in first reduction since 2020

Most Active Stocks

Axis Bank share price

1,181.30
03:29 PM | 4 OCT 2024
5.85 (0.5%)

Tata Steel share price

166.75
03:56 PM | 4 OCT 2024
-0.2 (-0.12%)

Oil & Natural Gas Corporation share price

295.20
03:58 PM | 4 OCT 2024
3.1 (1.06%)

Tata Motors share price

930.70
03:56 PM | 4 OCT 2024
4.7 (0.51%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

VIP Industries share price

563.85
03:57 PM | 4 OCT 2024
40.8 (7.8%)

Oil India share price

572.25
03:59 PM | 4 OCT 2024
33.4 (6.2%)

JK Paper share price

489.95
03:43 PM | 4 OCT 2024
27.1 (5.86%)

Home First Finance Company India share price

1,245.35
03:40 PM | 4 OCT 2024
63.15 (5.34%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    77,575.000.00
    Chennai
    77,581.000.00
    Delhi
    77,733.000.00
    Kolkata
    77,585.000.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.88/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts