The price of bitcoin (BTC) marks a new all-time high amid the expectations generated by the announcements that the United States Federal Reserve (Fed) will make. At 2:00 p.m. Eastern time, the body led by Jerome Powell will confirm whether it will cut interest rates and how much it will be.
As CriptoNoticias has reported, it is expected that the Federal Open Market Committee (FOMC), in charge of the Fed’s monetary policy, make a new cut of 25 basis points.
In this way, The annual interest rate will be 4.50%- 4.75% per year. Currently, it is 4.75%-5%.
Less than 2 hours after the announcement, the bitcoin price reacts with high volatility and scored a new all-time high of $76,600as seen in the following graph of TradingView.
At the time of publication, the price of the coin created by Satoshi Nakamoto is $76,330.
When the interest rate drops, the cost of borrowing is lower, and that is why companies and Investors move their holdings into assets considered risky such as BTC and cryptocurrencies, with the aim of obtaining greater profits.
Furthermore, it should be noted that, in these contexts, the yield on Treasury bonds, considered the safest investment in the world, tends to decrease.