Bitcoin and Crypto Surge as Fed Signals Further Rate Cuts
NEW YORK – Bitcoin and the broader cryptocurrency market are experiencing a renewed surge following the Federal reserve’s first interest rate cut in 2025, with analysts predicting a potential $9.5 trillion impact as expectations mount for further easing. The move,widely anticipated,has injected fresh momentum into the crypto space after a period of consolidation.
The Fed’s decision to lower interest rates by 25 basis points-responding to a weakening labor market-has revitalized the bitcoin price, which had stalled in July. This cut is the first of what the central bank anticipates will be two additional rate reductions by year-end. Investors are currently betting on further quarter-point cuts in October and December, perhaps bringing the funds rate down to between 3.5% and 3.75% before the close of the year, according to CME’s FedWatch tool.
“Jerome Powell’s rate cut has injected fresh momentum into bitcoin, which has spent months knocking on the door of $118,000. With borrowing now cheaper, investors are chasing higher-yield opportunities,” explained Dom Harz, cofounder of bitcoin decentralized finance (DeFi) platform BOB.
the potential for expanded liquidity is a key driver of the bullish sentiment. ”The Fed’s 25-basis-point cut aligns with market expectations and could reinforce bitcoin’s role as a liquidity barometer,” stated CJ Burnett, chief revenue officer at U.S.-based bitcoin mining hosting company Compass. “Continued easing at upcoming meetings may support bitcoin’s momentum as global liquidity expands and investors seek assets that cannot be debased.”
The combined market capitalization of Bitcoin and other cryptocurrencies currently stands at approximately $2.6 trillion. Analysts suggest that a sustained period of lower interest rates could attract significant capital into the crypto market, potentially increasing its value by over 360%, or $9.5 trillion, as investors seek higher returns in a lower-yield environment.
