What happened?
Bitcoin value increased to $117,000 following the first rate cut by the Federal Reserve Bank since December. The central bank reduced the fed funds rate by 25 basis points to the new range of 4.00%-4.25% due to weaker job growth and a softening economic outlook. The bank’s projections indicate two more cuts this year signaling more liquidity in the global markets.
Who does this affect?
This development affects Bitcoin traders, investors, and anyone who closely monitors the value of cryptocurrencies. It also impacts those affected by federal interest rates, such as individuals with loans or investments tied to the rate. Moreover, the global economy will feel the effects of these cuts as they impact the strength of the dollar and inflation rates.
Why does this matter?
The rate cuts signify a significant shift in the monetary policy that could lead to increased inflows into digital assets like Bitcoin. This change matters to both cryptocurrency and traditional markets because it can trigger changes in investment strategies and behaviors. A potential increase in Bitcoin value could generate significant gains for those invested in this digital currency, further legitimizing it in the financial world.