Bitcoin (BitfinexUSD) price dropped after the Federal Reserve made its first rate cut since the Covid pandemic, reducing borrowing rates by a half percentage point, or 50 basis points.
The U.S. central bank lowered the federal funds rate to a range of 4.75% to 5%. This aggressive cut signals deepening concerns over the state of the U.S. economy, sparking volatility across multiple markets, including cryptocurrencies.
At 16:40 ET (20:40 GMT), Bitcoin price was flat on the day, trading at $60,189.00. ETH/USD was down 1.1%, exchanging hands at $2,138.87, while pDOTn/USD price dropped about 1.9%.
Cryptocurrency-related stocks gave up their earlier gains. While MicroStrategy Incorporated (NASDAQ:MSTR) shares rose 1.5% during the day, most bitcoin miners, including Marathon Digital Holdings Inc (NASDAQ:MARA) and Riot Platforms (NASDAQ:RIOT), along with crypto exchange Coinbase Global Inc (NASDAQ:COIN), ended flat to slightly negative.
The rate cut was announced after the Fed’s two-day meeting, and it comes after a year of aggressive tightening to combat inflation. Ten out of 19 Fed officials supported at least another half-point rate cut during the last two meetings of 2024.
Historically, rate cuts have weakened the U.S. dollar and benefited risk assets like stocks.
Bitcoin has had difficulty holding onto the gains it made earlier this year. After reaching highs of $65,000 in August, it has traded around the $60,000 handle in recent days.