Bitcoin climbed to a new all-time high on Monday, surpassing $107,000 as investor sentiment strengthened ahead of a widely anticipated interest rate cut by the Federal Reserve later this week.
The price of the world’s largest cryptocurrency rose as high as $107,229.38, marking a new record, before settling at $106,126.74, a nearly 3% increase, according to Coin Metrics.
The broader cryptocurrency market also showed gains. Ether, the second-largest digital asset, surged 3% to break through the $4,000 mark for the first time this year.
The CoinDesk 20 Index, which measures the performance of the top cryptocurrencies, traded about 1% higher.
Investor optimism fueled by expected rate cut
Investors are anticipating that the Federal Reserve will cut interest rates during its two-day policy meeting set to conclude on Wednesday.
According to the CME FedWatch Tool, there is a 96% probability of a 25-basis-point reduction.
Lower interest rates are generally seen as positive for bitcoin and other risk assets, as they tend to drive investors toward higher-yield opportunities.
Bitcoin, often compared to tech stocks for its volatility and growth potential, benefits from an environment of lower borrowing costs, a weakening US dollar, and a growing money supply.
“Bitcoin’s correlation with traditional risk assets like tech stocks continues to hold, and the potential rate cut provides a favorable backdrop for further price gains,” said an analyst at a leading crypto research firm.
Crypto stocks face mixed performance
Crypto-related equities reflected the broader market sentiment but saw mixed results as the trading session progressed.
Coinbase, a leading cryptocurrency exchange, gained over 1% in early trading before paring back some of its gains.
MicroStrategy, widely considered a bitcoin proxy due to its extensive holdings of the cryptocurrency, initially surged by as much as 7%.
However, its shares fell below the flat line later in the day. The company recently announced it would join the Nasdaq-100 stock index and the popular QQQ ETF later this month, a move expected to boost investor visibility and liquidity.
MicroStrategy’s founder, Michael Saylor, also revealed that the firm had purchased an additional 15,350 BTC, bringing its total bitcoin holdings to 439,000 BTC, valued at approximately $46 billion.
Saylor continues to buy bitcoin as the crypto market turns bullish.
Long-term catalysts driving bitcoin momentum
Bitcoin’s price surge extends its impressive performance this year. The cryptocurrency is up 9% for the month, 52% since the US presidential election, and a staggering 149% year-to-date.
The potential for a more favorable regulatory landscape under the incoming Trump administration has provided a significant boost to investor confidence.
Analysts point to discussions around establishing a national strategic bitcoin reserve as an emerging factor that could lend further credibility and adoption to the digital asset.
The Fed’s upcoming decision will remain in focus as traders weigh the implications of monetary easing.
A reduction in interest rates typically correlates with a softer US dollar, which has historically bolstered bitcoin’s appeal as a hedge against currency devaluation.
Can Bitcoin hit $200,000 in 2025?
Market analysts remain optimistic about bitcoin’s upward trajectory, citing its resilience in navigating macroeconomic uncertainties.
“With growing institutional adoption and favorable policy signals, bitcoin has a clear path for continued growth in the near term,” noted a strategist at a global crypto fund.
However, some warn that bitcoin’s recent gains may lead to short-term corrections.
“We’ve seen significant price appreciation, and a rate cut could trigger some profit-taking in the days following the announcement,” a market observer said.
Ether’s rise above $4,000 further underscores the broader momentum in digital assets, particularly as investors anticipate developments in Ethereum’s network upgrades and growing utility in decentralized finance (DeFi) applications.
Analyst at Bitfinex said, “The current bull market reflects strong institutional demand, led by ETFs and spot accumulation. Historical data suggests we are mid-cycle, following the April 2024 halving, with the market likely to peak around Q3-Q4 2025, approximately 450 days post-halving. Historically, post-halving years have seen the strongest rallies. Looking ahead, we believe the current run-up to over $100,000 has captured a significant portion of Bitcoinʼs price appreciation for this cycle. Our minimum price target for Bitcoin remains at $140,000- $200,000 around mid-2025”.
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