
Bitcoin surged to a one-month high of $65,661 after Fed's rate cut.
The Japanese yen dropped to 144.16 against the dollar after BOJ's decision to keep rates unchanged.
Analysts expect further interest rate cuts, with potential 125 basis points reduction by year-end.
Bitcoin, the largest cryptocurrency by market cap, has soared to a one-month high of $64,661, creating excitement across the market. This increase follows the Federal Reserveโs recent interest rate cut, which has energized crypto trading. At the same time, the Japanese yen continues to weaken, struggling under the pressure of recent economic policies.
What’s driving this surge? How will the yen’s weakness impact global markets? Join us as we delve into the details.
Bitcoin’s Rally Gains Momentum
This week, Bitcoin is up 8.8%, marking its second consecutive week of gains. The surge follows the Fedโs decision to cut interest rates by a notable 50 basis points, a move likely to lead more investors toward assets like cryptocurrencies.
Chris Weston, a top analyst at Pepperstone, highlighted the favorable economic conditions supporting Bitcoinโs rise. He noted that when Bitcoinโs price starts to climb, many investors experience fear of missing out (FOMO), which encourages them to buy in and pushes prices even higher.
Challenges Remain
Some analysts believe this rate cut may signal a larger trend, with expectations that rates could drop by another 125 basis points by the yearโs end. However, Fed Chair Jerome Powellโs comments about maintaining a higher neutral rate have tempered expectations for further immediate gains in the crypto market.
Ether, another major cryptocurrency, also benefited from this rally, rising 3% to $2,660.30โits highest price since late August.
Yen Weakens Further
While cryptocurrencies are on the rise, the Japanese yen continues to decline. After reaching a two-week high, the yen stood at 144.16 against the dollar on Monday, extending its losses from the previous week.
This decline began when the Bank of Japan (BOJ) decided to keep its interest rates unchanged, indicating no urgency to increase them. This decision came after the U.S. Federal Reserveโs rate cut, contributing to the yen’s ongoing struggles.
Global Markets Eye Fed’s Next Moves
Although Japanโs financial markets were closed for Autumnal Equinox Day, global investors are focused on the Fedโs actions, anticipating further rate cuts that could benefit equities and commodity-based currencies. This expectation is already reflected in the Australian dollarโs 0.4% rise to $0.68355.
The Fedโs recent moves have eased fears of a U.S. recession. Analysts at Goldman Sachs expect the U.S. dollar to rise slightly in the short term but potentially weaken again in the next six to twelve months.
The Road Ahead for Bitcoin
As Bitcoin continues its upward trend, the key question remains: Can it maintain this growth? Or will the yenโs struggles affect the broader global markets and the cryptocurrencyโs rise?
Investors will be watching closely for answers in the coming weeks.