Bitcoin’s rise back to $60,000 is being driven by speculation that the Federal Reserve will cut interest rates next week. Markets are anticipating a 25-50 basis point reduction, which could further fuel Bitcoin and other risk-on investments.
The possibility of a rate cut has been brewing since June when Federal Reserve Chair Jerome Powell suggested that the Fed might lower rates once inflation moved closer to its 2% target. With U.S. inflation now at 2.5%, a rate cut seems more likely.
The Federal Open Market Committee (FOMC) is set to announce its decision on September 18. A rate cut could provide an additional boost to Bitcoin, which has already seen a significant rally, up over 125% in the past year.
This move would align with recent decisions by other central banks, such as the European Central Bank and the Bank of Canada, both of which have recently reduced their rates by 0.25 percentage points, signaling a broader shift toward easing monetary policies globally.
If the Fed follows suit, Bitcoin’s value could continue its upward trajectory as lower interest rates make traditional investments less appealing, prompting more investors to explore alternatives like Bitcoin.