Federal Reserve cuts interest rates by 25 basis points, sending Bitcoin price to new ATH

As well as Trump's victory, the crypto market recently received another big news as the Fed cut interest rates by 25 bps. Bitcoin price, which often reacts to US news, has already reached a record high of around $77,000 and has been relatively stable.

The Fed is easy on monetary policy.

In line with market expectations, the US Federal Reserve cut rates by 25 basis points to 4.5%-4.75%, following moves by other central banks to ease monetary policy. As the price decision was awaited by the market, Bitcoin rose to a new all-time high of $76,700.

The rate cut comes after the election victory of Donald Trump, who had previously advocated for lower interest rates to boost economic growth.

Although Trump does not have direct control over the Fed's policies, the rate cuts are consistent with his economic agenda and campaign promises, which have often led to significant reductions in interest rates.

This rate cut breaks a years-long hiatus, marking only the second decline in four years.

The press release said: “Since the beginning of the year, the labor market situation has generally eased, and the unemployment rate has risen, but remains low.” Inflation has made progress on the committee's 2% target but remains somewhat higher.

Earlier today, the Bank of England cut rates by 25 basis points and Sweden's Riksbank cut its key interest rate by half a percentage point. Following the FOMC decision, the price of Bitcoin hovered around $76,718, a new record, up 1.8% in the last 24 hours.

Will the Fed keep rates up?

Investors are paying close attention to what Fed Chairman Jerome Powell says about the future direction of the central bank following Donald Trump's decisive U.S. election victory. Inflation has led the Fed to take a more conservative stance.

This could result in a slowdown, a halt or a reversal of the recent decline in prices. According to CME's FedWatch Tool, the probability of the Fed keeping current rates at 35% at its December meeting is up from 14% a month ago, with market sentiment shifting accordingly.

The latest news was very positive for Bitcoin as it recorded strong gains in November. Earlier this week, when Donald pulled ahead in the presidential election, Bitcoin increased, surpassing the all-time high set in March, growing signs of a possible return to the White House.

Currently, Bitcoin has increased by 8% in the week and more than 22% in the last month. With a market cap now over $1.5 trillion, Bitcoin is the ninth largest financial asset globally.