Bitcoin Reaches New All-Time High of $106,488 Amid Rate Cut Speculation
Bitcoin #BTC reached an all-time high of $106,488 today, reflecting a 2.15% increase in the last 24 hours. The cryptocurrency has risen 147% this year, influenced by the recent US election and increased institutional investments. A Federal Reserve rate cut is expected this week, with analysts viewing this policy shift as confirmation rather than a catalyst for Bitcoin's rise.
Luis Buenaventura, head of crypto at GCash, questions the Fed’s influence on price trends, stating that the market has anticipated the rate cut for weeks. Historical data indicates that Bitcoin typically gains an additional 35% within two months after experiencing 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 potential rate cut of 25 basis points would lower rates from 4.25% to 4.50%, according to the CME’s FedWatch Tool, which assigns a 93.4% probability to this outcome. If enacted, this would mark the second consecutive reduction following November’s cut.
What the Fed’s Decision Could Mean for Crypto
The Federal Reserve will announce its rate decision, interest rate projections, and economic forecasts on December 18 at 14:00 ET. Following this, Fed Chair Jerome Powell will hold a press conference. Observers expect the Fed may adjust its projections for rate cuts by the end of 2026, potentially lowering borrowing costs below 3%.
Henry Elder, principal at UTXO Management, noted the market's positive reaction to recent inflation data, stating, “The market likes seeing inflation come in within expectations.” Traders are currently debating whether $100,000 represents a ceiling or a new floor for Bitcoin. The bullish sentiment in the crypto market appears strong, supported by macroeconomic indicators.
Since the US presidential election, Bitcoin’s 145% year-to-date increase has largely mirrored overall market optimism. Inflows from spot ETFs and growing institutional interest have also significantly bolstered Bitcoin’s performance. Ether #ETH has similarly benefitted, rising back to $4,000, just 19% below its all-time high from November 2021.
Trump Pushes for National Bitcoin Reserve
The political landscape could further bolster Bitcoin’s growth. Former President Donald Trump aims to establish a strategic national Bitcoin reserve. While detailed plans are lacking, Eric Trump indicated on Bloomberg TV that Trump intends to be a strong advocate for the crypto industry.
Avinash Shekhar, Co-founder and CEO of Pi42, highlighted how macroeconomic conditions are fueling Bitcoin's expansion, noting its consistent upward trajectory driven by economic indicators and anticipated Federal Reserve interest rate cuts.