Risk assets start "celebrating"! Bitcoin takes the lead and returns to $62,000
Bitcoin rose due to the Fed's interest rate cut, returning to $62,000, with an increase of 2.87%. As traders adapt to the Fed's loose monetary policy, the S&P 500 index futures and Asian stock markets also rose. Fed Chairman Powell remains cautious about future rate cuts, leading to a relatively subdued market reaction. Analysts point out that loose policies are positive news for risk assets such as Bitcoin, and changes in future economic activities will be a focus of attention
Zhitong Finance APP noticed that due to the significant rate cut by the Federal Reserve causing a chain reaction in the market, Bitcoin rose to a three-week high as U.S. stock index futures surged. As of the time of publication, Bitcoin rose by 2.87% to $62,111.0.
As traders adapt to the expected start of a loose monetary policy by the Federal Reserve, S&P 500 index futures and Asian stock markets also rose.
The Federal Reserve cut borrowing costs by 50 basis points, marking the first rate cut in over four years. However, Federal Reserve Chairman Powell cautiously avoided committing to similar rate cuts in the future, stating that rate cuts will be guided by economic data. This subtle outlook dampened market reactions during the U.S. trading session on Wednesday.
Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for digital asset derivatives trading, stated, "The positive start of the loose monetary policy is good news for risk assets like Bitcoin. It takes a few hours for the market to see the big picture and begin to reflect the improvement in prospects."
Ahead of the Federal Reserve meeting, there was a divergence of opinions on whether officials would choose to raise rates by a quarter point or half a point. Powell and his colleagues are trying to maintain the strong momentum of the U.S. economy as labor market and inflation risks become more balanced.
David Lawant, research director at FalconX, said, "The focus will soon shift to the scale and scope of this cycle. From now on, the most important factor to watch will be the trajectory of economic activity."
Lawant noted that the correlation between cryptocurrencies and traditional investments such as stocks has recently increased, indicating that macroeconomic variables have been influencing the digital asset market.
On other fronts, the U.S. dollar index remains strong, while U.S. Treasury yields fell, which may reflect Powell's cautious signal about the scale of future monetary easing.
Chris Weston, research director at Pepperstone Group, wrote in a report, "The ongoing response function of the Federal Reserve remains unclear. They are still walking an unplanned path."