Bitcoin above $62,000, US stocks lower and more: Fed rate cut fallout

As stated repeatedly in recent days, all financial markets, especially crypto, were focused on the FOMC meeting that took place on September 18, as the US central bank was expected to cut rates of interest for the first time in about four years.

Once this came to fruition, the markets went into a rage, with massive price volatility. Here’s the aftermath 12 hours later.

BTC goes up

Many believed that interest rate cuts were already priced into riskier assets like bitcoin. Others, such as Arthur Hayes, claimed that such actions by the US Fed will paralyze the market. His words were actually from a long-term perspective, but the short-term has been quite positive for the price of BTC.

The asset had already risen from $57,600 to $60,000 a day earlier, but went on a real rollercoaster after the Fed made it official with a 50 basis point cut. In the first few hours after the announcement, BTC went up and down on several occasions.

12 hours later, when the dust has settled (for now), the price of bitcoin is almost 3% higher than yesterday and up 7% on a weekly basis. The asset hit a 3-week high above $62,500 today, but has pulled back slightly to $60,000 so far. Most altcoins have followed suit and the total crypto market capitalization has gained around $100 billion overnight.

Liquidations have soared to $200 million on a daily basis, with short films accounting for the lion’s share. Naturally, BTC leads the way with $75 million in destroyed positions, while ETH is next with $35 million.

Bitcoin/Price/Chart 19.09.2024. Source: TradingView Stocks down, gold volatile

Even the precious metal faced more volatility after the rate cut, moving from $2,550/oz to a new all-time high of $2,600 before returning to $2,545 and settling at $2,567.

The US stock market followed suit with early gains, but later posted smaller declines. The S&P 500 opened the day at 5,641, soared to nearly 5,680, but closed at 5,618. The Nasdaq Composite’s move was similar, from 17,663 to over 17,800 and up to 17,573 by the end of the day. The Dow Jones Industrial Average was slightly less volatile, but still ended the day with a minor loss.

While it is still early to draw any big conclusions, developments in the first 12 hours show that riskier assets like crypto have benefited so far from the Fed’s rate cut. However, time will tell if it will actually be a bullish move or if Hayes will be right.

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