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Bitcoin hit a new all-time high of $76,000 following Donald Trump’s election victory, reflecting a bullish market sentiment.
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The market anticipates a 0.25% Federal Reserve rate cut, which typically supports risk assets like Bitcoin by increasing liquidity and weakening the dollar.
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Traders are closely watching the Federal Reserve’s next moves, particularly any signals from Fed Chair Jerome Powell’s comments. There’s a mixed outlook with concerns about potential hawkish policies dampening market enthusiasm.
Bitcoin {{BTC}} surged to a new all-time high of $76,000 late Wednesday following Republican Donald Trump’s win at the U.S. elections, ushering in a widely expected bullish era for the crypto sector.
BTC added 6.6% in the past 24 hours, CoinGecko data shows, extending 30-day gains to over 21% and more than doubling in value over the past year. Strength in BTC saw everything from dog-themed tokens to those of decentralized exchanges zooming more than 10% — mirroring a stock and bond market rally that’s quickly being described as the “Trump trade.”
“BTC has now navigated three election cycles since its inception in 2009, each followed by rallies to new highs, with prices never dipping back to pre-election levels,” QCP Capital traders said in a Telegram broadcast late Tuesday. “The dollar surged 1.2% to reach July highs of 105, with yields also climbing as markets anticipate stronger economic growth and increased fiscal spending.”
“We expect this bullish momentum to hold strong as we head into 2025,” QCP added.
But now that Trump has been elected to office, what’s next for the markets in the short term? Traders are quickly turning their eyes to the next round of Federal Reserve rate cuts scheduled for later Thursday. A pivot to lower borrowing costs has historically buoyed bullish sentiment among traders as cheap access to money spurts growth in riskier sectors.
Analysts expect a 0.25% rate cut this week, which has historically benefited assets like BTC by diluting the dollar’s value and pushing investors towards alternative investments. There’s a 97% chance for a 25 bps cut on Polymarket, with 1% for 50 bps and even lower for higher.
“A 25bps rate cut is widely anticipated, with the market pricing in a 96.8% probability of such a move (according to FedWatch),” shared Min Jung, research analyst at Presto Research, in a note to CoinDesk. “However, the rates market has been signaling uncertainty, evidenced by the benchmark 10-year Treasury yield climbing to 4.48%, its highest level over four months.”
