Investing.com — Bitcoin prices rose on Thursday after the Federal Reserve cut interest rates by a wide margin and signaled the start of an easing cycle, though further gains were limited by a less dovish outlook.
At 01:41 ET (05:41 GMT), the token was up 2.9% to $61,98.5, briefly touching $62,539.8. The token also broke out of the $50,000 to $60,000 trading range that it had held for most of the year, though it remained to be seen whether the breakout could be sustained.
Broader cryptocurrency prices also rose following the Fed rate cut, although strength in headline earnings limited gains.
Bitcoin rises, but less dovish Fed outlook limits gains
The world's largest cryptocurrency followed a broader surge in risk-driven assets as markets cheered a , as well as the start of the bank's first easing cycle since 2020.
But this optimism was tempered somewhat by concerns about how fragile the Fed thought the US economy was, given that the 50 basis point cut was at the high end of market expectations.
Federal Reserve Chairman Jerome Powell calmed some concerns about the economy, saying the risks between higher inflation and a cooling labor market were now balanced.
But Powell also said the Fed had no intention of cutting rates to ultra-low levels and that the central bank's neutral rate will be higher than in the past. His comments present a higher outlook for rates over the medium and long term.
This notion boosted the dollar.
While lower rates bode well for high-risk speculative assets like cryptocurrencies, they are now unlikely to reach the lows seen during the COVID-19 pandemic. Ultra-low rates were a key driver of crypto’s rally in 2021.
But the industry has since had to contend with a series of harsh regulatory measures, as well as dwindling interest from retail investors. The launch of spot bitcoin exchange-traded funds earlier this year provided only a fleeting boost.
Cryptocurrency prices today: Altcoins rise following Bitcoin's example
Broader cryptocurrency prices benefited from improved risk appetite and rose in tandem with Bitcoin.
The world's No. 2 cryptocurrency rose 3.9% to $2,412.52, while , , and rose between 0.4% and 5.7%.
Among meme tokens, it rose by 3.3%.
