Bitcoin Jumps to $88,000 as the Fed Reclaims the Spotlight
Still, caution prevails, largely due to the sharp decline and volatility Bitcoin experienced in November, which undermined confidence.
Quick overview
- Major cryptocurrencies are experiencing mixed signals as investors await new developments.
- Bitcoin is trading around $88,775 with slight gains, while Ethereum has increased by 2.2% to $2,991.
- Investor caution persists due to recent volatility and uncertainty surrounding potential interest-rate cuts by the U.S. Federal Reserve.
- Traditional markets are seeing gains, driven by rising expectations of a U.S. rate cut and optimism over geopolitical developments.
The major cryptocurrencies are trading with mixed signals as investors remain cautious while awaiting fresh developments.
The crypto market is showing little movement amid ongoing uncertainty over whether the U.S. Federal Reserve (Fed) will move forward with a potential interest-rate cut. In this context, Bitcoin (BTC) is posting slight gains and is trading around $88,775.
Ethereum (ETH) is up just 2.2%, reaching $2,991, while altcoins are advancing up to 3.1%, led by BNB.
Interest Rates and a Possible New Fed Chair Raise Questions
After several weeks of downward pressure, weak U.S. economic data has revived optimism among investors, who are holding out hope for a 25-basis-point rate cut from the Fed to ease borrowing costs.
Still, caution prevails, largely due to the sharp decline and volatility Bitcoin experienced in November, which undermined investor confidence. Market participants are reluctant to make big bets until clearer macroeconomic signals emerge.
The Fed returned to the spotlight after Donald Trump hinted at the possibility of replacing the current Fed Chair. Speculation has grown around Kevin Hassett —a close adviser to Trump— as a potential candidate. Various reports suggest he could support aggressive rate cuts if appointed.
Many see this scenario as a shift toward a more flexible monetary stance, which generally benefits risk assets such as cryptocurrencies.
Traditional Markets
Meanwhile, major Wall Street indexes are trading higher in Wednesday’s pre-market session. Rising expectations of a U.S. rate cut are lifting global equities, while in Europe optimism is growing over a potential peace agreement in Ukraine, and U.K. markets prepare for the budget announcement.
In this environment, the S&P 500 is up 0.79%, the tech-heavy Nasdaq Composite rises 0.84%, and the Dow Jones Industrial Average gains 0.81%.
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