Fed cuts interest rates by a whopping 50 basis points, what's the aftermath for BTC?

2024-09-19, 02:53

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According to Gate.io market data, BTC is currently priced at $62,250, with a 24-hour increase of 3.5%. The current funding rate for perpetual contracts is -0.015%, and the long-to-short ratio for major holders on Gate.io is 1.35:1, indicating strong bullish sentiment. The capital inflow and outflow indicators show a net inflow of funds, and the market sentiment index is at 45, reflecting a neutral state. BTC may still have good upside potential in the near term.
Today, the U.S. Federal Reserve concluded its two-day monetary policy meeting, announcing a reduction in the target federal funds rate range to 4.75% to 5%, marking a 50 basis point cut—the first rate decrease since 2020. 
**This policy rate adjustment signifies a formal shift in the Fed's monetary policy. **From March 2022 to July of last year, the Fed raised rates 11 times in a row, totaling an increase of 525 basis points, and has kept the policy rate steady at a high level since last July.
Historical data shows that the last time the Fed cut rates by 50 basis points was in March 2020, after which <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> experienced a significant increase, rising more than tenfold. Following that cut, Bitcoin climbed from the $4,000 to $6,000 range, eventually peaking at $69,040 in November 2021. This suggests that the Fed's rate cuts can have a positive impact on Bitcoin's price.
However, it’s important to note that past performance does not guarantee future results. The Bitcoin market is influenced by various factors, including macroeconomic conditions, market sentiment, and regulatory policies. Therefore, while the Fed's rate cut may have some impact on Bitcoin's price, investors should remain cautious and closely monitor market dynamics and risk factors.
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<div>Author: **Icing**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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