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Bitcoin popped up over $60,000 and kept climbing early Thursday after the Federal Reserve slashed interest rates.
The price of the popular cryptocurrency popped up 1.3% Thursday morning to reach $62,524. It had fallen below the $60,000 threshold prior to the Federal Open Market Committee vote, as uncertainty around the size of the cut had markets waiting with bated breath.
But the Fed’s decision to bring the federal funds rate down by half a point, to 4.75-5.0%, after more than a year of 5.25-5.5%, has begun to spur markets. Risky assets like crypto tend to get a boost from lower borrowing costs, since investors are able to borrow money more cheaply.
The broader crypto market jumped 4.48% over the past 24 hours, reaching a $2.16 trillion market capitalization, according to CoinMarketCap.
Ethereum, the second biggest cryptocurrency by market cap, was up 2.66% Thursday morning to $2,358. Other popular coins, including Solana, Dogecoin, and Cardano, also saw an upswing.
Traditional markets were also boosted by the decision. Despite a bit of flip-flopping Wednesday — and closing slightly down — Dow futures soared almost 500 points Thursday morning, S&P 500 futures were up 1.6%, and Nasdaq futures climbed 2%.
And analysts are expecting even more easing to come from the Fed after this strong start. Goldman Sachs (GS+1.86%) is now forecasting a longer string of consecutive 25 basis-point cuts from November 2024 through June 2025, when its expects the funds rate to end up at 3.25-3.5%. It had previously projected consecutive cuts to close out 2024, followed by quarterly cuts next year.
Bank of America (BAC+2.09%) is similarly expecting 75 basis points of cuts in the fourth quarter of this year, but expects another 125 basis points of cuts in 2025, for a slightly lower neutral rate of 2.75-3%.
In a news conference Wednesday, Fed Chair Jerome Powell framed the cuts as a “recalibration” of policy, given falling inflation and rising employment risks.