The post The Fed is expected to cut interest rates twice in 2025, what might this mean for the Bitcoin price? appeared on BitcoinEthereumNews.com.

The cryptocurrency market has gone mainstream. It is no longer retail investors’ assets as institutions globally are investing in Bitcoin and other major cryptocurrencies.  As a risk-based asset, Bitcoin’s price is affected by central bank policies, especially those from the United States Federal Reserve. Bitcoin’s rally in 2024 and connections with rate cut The cryptocurrency market was bullish in 2024, with the Bitcoin price surging by over 100%. The rally allowed Bitcoin to rally to an all-time high above $100k. A key catalyst to Bitcoin’s surge last year was the multiple rate cuts by the Federal Reserve. In 2024, the Fed cut rates three times, bringing it down to the target range of 4.25%-4.50%. Before then, the rate had been on a lofty plateau of 5.25%-5.50% since July 2023. The reduced interest rates affected Bitcoin’s price, allowing it to hit the $100k mark for the first time in its history. When interest rates are high, the cost of borrowing money is high. Higher interest rates decrease the liquidity in financial markets, providing more capital for less risky investments like bonds. However, lower interest rates increase the liquidity in financial markets, with investors opting to push money into riskier assets like Bitcoin.  Fed kept interest rates steady in January Bitcoin reached an all-time high price of $109,410 on January 20 as the market reacted to Trump assuming office. However, it has since lost 11% of its value and now trades just above $97k. A key factor in the poor market performance in the past few weeks was the Fed’s decision to hold interest rates steady. On January 29th, the Fed announced that the borrowing rate remained between 4.25% and 4.5%. Leaving the rate unchanged affected Bitcoin’s price as it has failed to rally to a new all-time high. It has also…

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Filed under: News - @ February 18, 2025 12:26 pm