The US Federal Reserve announced a rate cut of 0.25% yesterday, the first rate cut since 2008, and the news led to an increase in Bitcoin. As of 10:00 AM PST, it was reported at $10071.83 USD, up 1.8% during the 24-hour basis. Some analysts believe that interest rate cuts will push funds to other risk assets, which will become the boost of bitcoin.
When the Fed responded to the global economic slowdown and trade tensions, it announced its interest rate cut for the first time in 10 years and Bitcoin rose 200 dollars in the three hours after the announcement, and once again exceeded the level of $10,000 USD. As we all know, Bitcoin came to be after the 2008 financial tsunami, after the global central bank pushed for quantitative easing.
Tom Lee, the well-known cryptocurrency analyst and founder of Fundstrat Global Advisors, said in an interview with Fox Business that the Fed’s interest rate cuts benefit Bitcoin, because investors will use Bitcoin as a hedge asset to deal with global market risks. Alan Silbert, managing director of INX Trading Platform, believes that the cut in interest rates means that investors have fewer reasons to hold US dollars and believe that the Fed will have more interest rate cuts in the future.
However, the news of interest rate cuts did not drive the overall cryptocurrency market. Among the top ten market capitalization cryptocurrencies, only four rose, and the second-largest Ethereum in the market value fell slightly by 0.4% to $214.32 USD, while Ripple fell 2.1% to $0.31 USD.