Bitcoin and crypto markets rally after FOMC meeting Minutes release
- The FOMC Minutes from its meeting held in July indicated a rate cut will happen in September.
- Progress on inflation and increasing unemployment provide reasons to reduce rates by 25 bps
- Bitcoin jumped more than 3% following the Minutes' release.
- Ethereum and other altcoins also had their fair share of rise.
Bitcoin (BTC) and several other cryptocurrencies rallied briefly on Wednesday after the Federal Open Market Committee (FOMC) released minutes from its July meeting.
Bitcoin and crypto market could be on the cusp of a bull market resumption
The Minutes from the FOMC July meeting indicated that the Federal Reserve (Fed) is leaning toward cutting interest rates by 25 basis points in September. Several participants agreed that the US had made progress in slowing down inflation, as it is currently moving toward the 2% target. Participants also noted that rising unemployment rates and reducing inflation have provided a cause to cut rates by 25 basis points in the coming months.
Many participants also agreed that easing rates too late will weaken the economy. Following the release of the Minutes, CNBC reported that the consensus among traders is that there is a 100% certainty that the Feds will cut rates in September.
Hence, the question among most traders has shifted from whether the Fed will cut rates to how many basis points the agency will reduce rates by.
Following the Minutes release, the entire crypto market capitalization jumped by over 2%. Bitcoin, which has struggled around the $59K to $60K range in the past week, jumped over 3% just shy of $62K. Ethereum (ETH) also rose by over 2% following the report.
Risk assets like cryptocurrencies and stocks tend to perform strongly during lower interest rates environment.
There were also notable rises of 8% and 5% in Cardano (ADA) and Avalanche (AVAX), respectively. This is one of their highest daily performances since the market started retracing in late March into mid-April. Chainlink (LINK), Polkadot (DOT), Uniswap (UNI), Polygon (MATIC), Near Protocol (NEAR) and Internet Computer (ICP), among other tokens, also saw their fair share of gains.
Some Top Cryptocurrencies
The gains across these cryptocurrencies have also caused a rise in derivatives liquidations, with short traders sustaining over $31 million in liquidations in the past 4 hours.
Several crypto community members have expressed confidence that the recent rise might be the resumption of the bull market run, especially if the Fed eventually cut rates in September.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
