Bitcoin surged 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 soared to $107,229.38, a new record, before closing at $106,126.74, an increase of nearly 3%, according to Coin Metrics.
The broader cryptocurrency market also saw gains. Ether, the second-largest digital asset, surged 3% to cross the $4,000 mark for the first time this year.
The CoinDesk 20 Index, which measures the performance of top cryptocurrencies, traded about 1% higher.
Investors are hopeful of rate cut
Investors are expecting the Federal Reserve to cut interest rates during its two-day policy meeting ending on Wednesday.
According to the CME FedWatch tool, there is a 96% chance of a 25-basis-point cut.
Low interest rates are generally considered a positive for Bitcoin and other risk assets, as they drive investors toward higher-yielding opportunities.
Bitcoin, which is often compared to tech stocks for its volatility and growth potential, is benefiting from an environment of low borrowing costs, a weak US dollar and a growing money supply.
“Bitcoin continues to correlate with traditional risk assets like tech stocks, and a potential rate cut provides a favorable backdrop for further price increases,” said an analyst at a leading crypto research firm.
Crypto stocks are facing mixed performance
Crypto-related equities reflected broader market sentiment, but saw mixed results as the trading session progressed.
Coinbase, a leading cryptocurrency exchange, gained more than 1% in early trading before paring some of its gains.
MicroStrategy, widely considered a Bitcoin proxy due to its extensive holdings of the cryptocurrency, rose as much as 7% early on.
However, its shares later fell below the flat line. The company recently announced that it will join the Nasdaq-100 stock index and the popular QQQ ETF later this month, a move that is expected to increase visibility and liquidity for investors.
MicroStrategy’s founder, Michael Saylor, also revealed that the firm has purchased an additional 15,350 BTC, bringing its total Bitcoin holdings to 439,000 BTC, worth approximately $46 billion.
Saylor continues buy bitcoin As the crypto market booms.
Long-term catalysts are boosting Bitcoin’s momentum
The surge in Bitcoin’s price has added to its impressive performance this year. The cryptocurrency is up 9% this month, up 52% since the US presidential election and up a staggering 149% year-to-date.
The prospect of a more favorable regulatory landscape under the incoming Trump administration has provided a significant boost to investor confidence.
Analysts have pointed to discussions about establishing a national strategic bitcoin reserve as an emerging factor that could help bring further credibility and adoption to the digital asset.
The Fed’s upcoming decision will remain in focus as traders consider the implications of monetary easing.
Lower interest rates are typically related to a softer US dollar, which has historically boosted Bitcoin’s appeal as a hedge against currency devaluation.
Could Bitcoin reach $200,000 in 2025?
Market analysts remain optimistic about Bitcoin’s upward move, citing its resilience in dealing with macroeconomic uncertainties.
“With growing institutional acceptance and favorable policy signals, Bitcoin has a clear path to sustained growth in the near term,” said a strategist at a global crypto fund.
However, some have warned that Bitcoin’s recent gains could lead to a short-term correction.
“We have seen significant price appreciation, and the rate cut may lead to some profit-taking in the days following the announcement,” said a market observer.
Ether’s rise above $4,000 underscores broader momentum in digital assets, especially as investors anticipate developments in Ethereum’s network upgrades and growing utility in decentralized finance (DeFi) applications.
The Bitfinex analyst said, “The current bull market reflects strong institutional demand due to ETF and spot accumulation. Historical data shows that we are in the mid-cycle following the April 2024 halving, with the market likely to peak around Q3-Q4 of 2025, approximately 450 days after the halving. Historically, the strongest rallies have been seen in the years following the halving. Looking ahead, we believe the current surge above $100,000 has captured a significant portion of Bitcoin’s price appreciation for this cycle. Our minimum price target for Bitcoin remains at $140,000-$200,000 by mid-2025.
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