Bitcoin climbs to $61.7k as Fed minutes hint at rate cut in September Bitcoin climbs to $61.7k as Fed minutes hint at rate cut in September
The document also hints at a 25 basis points (bps) rate cut due to "recent progress on inflation" and "increases in the unemployment rate."
2 min read
Updated: Aug. 21, 2024 at 10:10 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin (BTC) is back above $61,000 after leaping 3.5% in the past 24 hours, fueled by the release of bullish Fed minutes related to the July meeting on Aug. 21.
Ethereum (ETH) followed with 1.5% growth in the same period, while Solana (SOL) remained in the red for the day — down 0.6% as of press time.
The minutes’ summary doubles down on Fed Chairman Jerome Powell‘s recent remarks about a likely interest rate cut if market data continues to come in line with expectations. The document reads:
“The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.”
Notably, the document also hints at a 25 basis points (bps) rate cut due to “recent progress on inflation” and “increases in the unemployment rate.” This would bring the interest rate benchmark to 5% from the current 5.25%.
The news is positive for crypto and other risk assets, as the reduction in bond yields makes them more attractive.
The equity market also reacted positively to the Fed minute, with the S&P 500, Nasdaq, and Dow Jones closing the day with positive movements of 0.42%, 0.57%, and 0.14%, respectively.
Interestingly, the odds of a 25 bps cut fell to 72% from 77% on Polymarket following the Fed minutes, while the odds of a 50 bps or more rose to 22% from 18%.
US elections could potentially hold prices down
Despite the potential bullish outcome in September, Bitfinex analysts believe the most significant narrative impacting crypto markets is the upcoming US presidential elections.
According to the analysts:
“As Democrat nominee Harris has seen an increase in odds of winning to almost equal Republican nominee, former President Trump’s odds, it induces uncertainty in markets, especially crypto.”
After falling 10% below Vice President Kamala Harris’ odds of winning the election, former President Donald Trump’s odds recovered to 52% on Polymarket and are now 5% ahead of the Democrat candidate whose odds have fallen to 47%.
However, despite the election outcome remaining uncertain, Bitfinex analysts believe that the market will recover if Trump’s odds have already bottomed.
Mentioned in this article
Author 
Gino Matos
Gino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,485.48
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Solana
$195.701
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Bitfinex
Bitfinex is a digital asset trading platform offering state-of-the-art services for digital currency traders and global liquidity providers.
Polymarket
Polymarket is a decentralized prediction market platform that enables users to bet on world events using cryptocurrency.
Kamala Devi Harris (born October 20, 1964) is an American politician and attorney serving as the 49th Vice President of the United States.
Donald John Trump was born on June 14, 1946, in Queens, New York City.
