Bitcoin raced to $62k as Fed teased September rate cut

Bitcoin surged $1,100 in just 10 minutes after Fed Chair Jerome Powell made lukewarm remarks during his Jackson Hole speech.

“The time has come for policy adjustment,” Fed Chairman Powell said at Jackon Hole on Aug. 23 ahead of the September Federal Reserve policy meeting. Powell’s comments reaffirmed the Fed’s confidence in pushing inflation to 2%, meaning rate cuts are likely.

Bitcoin (BTC) briefly traded above $62,000 but later pulled back as the broader crypto market reclaimed some of its initial gains. Public opinion attributed Bitcoin’s brief rally to Powell’s comments.

Still, Powell said incoming data will determine how much looser the Fed will continue to implement. As Crypto.news reported, lowering interest rates would likely be bullish for the price of Bitcoin and therefore the broader cryptocurrency market.

Fed’s rate cut could boost Bitcoin market

Typically, lower funding rates lead to improved liquidity and a greater appetite for risk assets, a category that often includes Bitcoin and other digital assets. With the U.S. stock market and gold trading at all-time highs, there is speculation that capital seeking new profits could be flowing into Bitcoin.

Bitcoin has been stuck in the $53,000 to $61,000 range for weeks after falling to $49,000 after Black Monday earlier this month.

Spot Bitcoin exchange-traded funds recorded volatile flows, but as of press time, there were six consecutive days of capital inflows.

The reduced supply due to the halving in April, which reduced block rewards by 50%, EFT purchases and possible interest rate cuts could support Bitcoin’s bullish thesis. The asset changed hands at $61,500 after the so-called test pump stemming from Powell’s Jackson Hole speech.

24-hour BTC price chart – August 23 | Source: crypto.news