Bitcoin’s price surged on Wednesday, driven by anticipation of a Federal Reserve interest rate cut and positive sentiment surrounding capital flows into spot exchange-traded funds (ETFs). As of 00:43 ET (04:43 GMT), Bitcoin was trading at $60,469.10, marking a 3.8% increase. This uptick comes after a month of fluctuating between $50,000 and $60,000.
The broader cryptocurrency market also experienced gains as investors positioned themselves for a potential reduction in U.S. interest rates, which is expected to favor riskier, speculative assets.
Bitcoin ETFs Experience Inflows
Recent data revealed that BlackRock’s iShares Bitcoin Trust experienced its first influx of capital in two weeks on Monday, reversing a streak of outflows that began in mid-August. This shift in sentiment comes amidst ongoing concerns about the U.S. presidential election, interest rates, and potential recession, which had previously suppressed crypto prices.
However, trading volumes in U.S. Bitcoin ETFs remain significantly lower compared to earlier in the year, reflecting waning enthusiasm, particularly among retail investors.
MicroStrategy Expands Bitcoin Holdings
MicroStrategy Incorporated (NASDAQ: MSTR) disclosed that it acquired approximately $1.1 billion worth of Bitcoin between August 6 and September 12, reinforcing its position as the largest corporate holder of the cryptocurrency with a total of $9.5 billion in holdings. The company also announced plans to raise about $700 million through a private issuance of convertible bonds due in 2028, with the funds earmarked for debt repayment and further Bitcoin purchases.
Altcoins and Market Expectations
The cryptocurrency market saw broad-based gains as traders awaited a widely anticipated interest rate cut by the Federal Reserve later in the day. Ethereum, the second-largest cryptocurrency, increased by 1.4% to $2,319.94, while other altcoins such as XRP, Solana, Polygon (AS: MATIC), and Cardano showed mixed performance within a flat-to-low range. Meme tokens like Dogecoin saw a modest increase of 0.2%.
The Federal Reserve is expected to announce an interest rate cut at the end of its meeting later Wednesday. Market speculation initially favored a 25 or 50 basis point reduction, but recent trends suggest a growing consensus for a more substantial cut. Lower interest rates are anticipated to boost liquidity, which could be channeled into riskier assets such as cryptocurrencies.
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