Bitcoin climbs to $61.7k as Fed minutes hint at rate cut in September
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 Powells 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 Trumps odds, it induces uncertainty in markets, especially crypto.
After falling 10% below Vice President Kamala Harris odds of winning the election, former President Donald Trumps 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 Trumps odds have already bottomed.
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Text source: CryptoSlate
