The crypto market has already priced in the Fed rate cut, and historical data suggests Bitcoin could gain an extra 35% within two months after a 50% surge over 60 days.
Bitcoin BTC $72 453 24h volatility: 6.4% Market cap: $1.45 T Vol. 24h: $80.02 B soared to a new all-time high of $106,488 today, marking a 2.15% rise in the last 24 hours. The leading cryptocurrency has surged 147% this year due to factors such as the recent US election and higher institutional investments. Meanwhile, a Federal Reserve rate cut is anticipated this week. Analysts view this monetary policy shift more as confirmation than a trigger for Bitcoin’s rise.
Luis Buenaventura, head of crypto at GCash, doubts the Fed’s impact on price trends. He notes that the market has anticipated the rate cut for weeks. According to him, historical data supports his view, showing Bitcoin typically gains an extra 35% within two months after a 50% surge over 60 days.
“I don’t believe a Fed rate cut will have any substantial impact on the price trend, as the market has been expecting it for at least a few weeks now,” said Luis Buenaventura.
A likely rate cut of 25 basis points would reduce rates from 4.25% to 4.50%, as indicated by the CME’s FedWatch Tool, which assigns a 93.4% probability to this outcome. If the Fed implements the cut, it will mark the second consecutive reduction following November’s cut.
What the Fed’s Decision Could Mean for Crypto
The Federal Reserve is set to announce its rate decision, interest rate projections, and economic forecasts on December 18 at 14:00 ET. Shortly afterward, Fed Chair Jerome Powell will address the press. Observers anticipate the Fed may revise its projections for rate cuts by the end of 2026, potentially lowering borrowing costs to below 3%.
Henry Elder, principal at UTXO Management, commented on the market’s response to recent inflation data, stating, “The market likes seeing inflation come in within expectations.” Traders are now debating whether $100,000 is a ceiling or a new floor for Bitcoin. The crypto market’s bullish sentiment appears robust, fueled by these macroeconomic indicators.
Since the US presidential election, Bitcoin’s 145% year-to-date rise has largely mirrored broader market optimism. Inflows from spot ETFs and growing institutional interest have also provided substantial tailwinds for the alpha crypto. Ether ETH $2 124 24h volatility: 8.0% Market cap: $256.34 B Vol. 24h: $33.21 B has similarly benefited, climbing back to $4,000 — just 19% shy of its all-time high set in November 2021.
Trump Pushes for National Bitcoin Reserve
The political environment could significantly support Bitcoin’s ascent. Former President Donald Trump aims to create a strategic national Bitcoin reserve. However, detailed plans are absent, Eric Trump mentioned on Bloomberg TV that Trump would act as a strong advocate for the crypto industry.
Avinash Shekhar, Co-founder and CEO of Pi42 emphasized how macroeconomic conditions are driving Bitcoin’s expansion. He pointed out Bitcoin’s consistent upward momentum due to economic indicators and the anticipated Federal Reserve interest rate cuts.
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