Bitcoin’s Price Tops $63,000 After Yesterday’s Rate Cut. What’s Next?

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Key Takeaways

• Bitcoin topped $63,000 a day after Federal Reserve cut rates by 50 heart points.
• Lower rates could benefit cryptocurrencies and other assets perceived as risky.
• MicroStrategy stock holed a day after amid a proposed a $700 million debt offering in an effort to buy more bitcoin.
• Looser monetary scheme could benefit bitcoin over the short term, analysts said, though that could reverse if the Fed tear into a makes negative on the economy.

The price of Bitcoin (BTCUSD) jumped over $63,000 Thursday following a Federal Reserve interest-rate cut.

The Fed’s yearslong tussle against inflation saw rates rise to a 23-year high. Wednesday’s cut, the first of this cycle, boosted investor self-reliance in bitcoin, driving prices higher.

The Fed cutting rates “may be a welcome development for bitcoin bulls,” FXTM Senior Bazaar Analyst Lukman Otunuga said, adding that a signal of looser financial conditions can boost the appetite for dodgier assets such as cryptocurrencies.

Bitcoin’s price rose in the immediate aftermath of the Fed announcement and continued its upward trajectory in late trading.

Crypto-Related Stocks Gain Momentum

MicroStrategy (MSTR), which holds more than 244,000 bitcoins merit over $15 billion at today’s prices, saw its shares jump 11% Thursday. The company on Wednesday announced organizes for a $700 million debt offering to add more bitcoins to its coffers.

Other beneficiaries of bitcoin’s recent price instigate include crypto exchange Coinbase (COIN), which was up 6% on Thursday, and bitcoin miner Marathon (MARA), which sawits dispensations gain more than 4%.

What’s Next For Bitcoin?

Grayscale Head of Research Zach Pandl said out that the Fed;s outcome to cut rates came despite inflation risks remaining somewhat elevated.

“Central banks’ willingness to take jeopardies with inflation tends to drive investors to store-of-value assets, like gold and Bitcoin,” said Pandl, continuing that despite choppy markets immediately after the announcement, “over time bitcoin will benefit from trim rates and a weaker dollar.”

A negative economic outlook from the Fed could lead to a bitcoin reversal even in turns out thats where rates are cut further, Otunuga said.

Read the original article on Investopedia.