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Bitcoin hit a new all-time high of $76,000 following Donald Trump’s election victory, reflecting bullish market sentiment.
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The market expects a 0.25% interest rate cut from the Federal Reserve, which typically supports risky assets like Bitcoin by increasing liquidity and weakening the dollar.
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Traders are closely watching the Federal Reserve’s next moves, especially the signals from Fed Chairman Jerome Powell’s comments. The outlook is mixed and there are concerns that aggressive policies may dampen market enthusiasm.
Bitcoin {{BTC}} rose to a new all-time high of $76,000 on Wednesday following Republican Donald Trump’s victory in the US elections, ushering in a widely expected bullish era for the crypto sector.
BTC added 6.6% in the past 24 hours, CoinGecko data shows, extending its 30-day gain to more than 21% and more than doubling its value over the past year. BTC’s strength caused everything from dog-themed tokens to those of decentralized exchanges to zoom by more than 10% – mirroring a rally in the stock and bond markets that is quickly being dubbed as the ‘Trump trade’ .
“BTC has now weathered three election cycles since its inception in 2009, each followed by rallies to new highs, with prices never falling back to pre-election levels,” QCP Capital traders said in a Telegram broadcast late Tuesday. “The dollar rose 1.2% to reach a July high of 105, with yields also rising as markets anticipated stronger economic growth and higher budget spending.”
“We expect this bullish momentum to remain strong as we move into 2025,” QCP added.
But now that Trump has been elected president, what’s next for the markets? Traders are quickly turning their eyes to the Federal Reserve’s next round of rate cuts, scheduled for later Thursday. A shift to lower borrowing costs has historically driven bullish sentiment among traders, as cheap access to money fuels growth in riskier sectors.
Analysts expect a 0.25% rate cut this week, which has historically benefited assets like BTC by diluting the value of the dollar and pushing investors toward alternative investments. There is a 97% chance of a 25 basis point cut on Polymarketby 1% for 50 basis points and even lower for higher.
“It is widely expected that rates will be cut by 25 basis points, with the market estimating a 96.8% probability of such a move (according to FedWatch),” said Min Jung, research analyst at Presto Research, in a note to CoinDesk . “However, the interest rate market signals uncertainty, which is evident from the increase in the yield on ten-year government bonds to 4.48%, the highest level in four months.”
