Digital Cryptocurrency Bitcoin Reaches 4-Week Peak of $117,000 Prior to Federal Interest Rate Announcement
The United States Federal Reserve (Fed) is set to lower interest rates for the first time this year, a move that is expected to cause short-term volatility but create long-term opportunities in the stock market today. This decision, anticipated around September 16-17, 2025, is expected to lead to greater liquidity and potentially spur a new rally in Bitcoin price and other risk assets like gold and stocks.
According to crypto analyst Ash Crypto, rate cuts result in liquidity flowing from less-risky assets like treasury bills to high-risk assets such as stocks and cryptocurrencies. This liquidity influx is believed to be a major catalyst for a parabolic Q4 rally.
Tom Lee, speaking on CNBC, shares a similar sentiment, predicting that Bitcoin price and Ethereum will make a "monster move" in the last three months of this year. Lee attributes this potential surge to the Fed's ability to reinject confidence by stating they are back into an easing cycle.
Historically, such monetary easing has been bullish for riskier assets like cryptocurrencies. This trend is echoed by economist Alex Kruger, who remains bullish on equities and Bitcoin price, despite markets forgetting how much Bitcoin can move due to recency bias.
The weakening US dollar, as indicated by a 12% decrease in the dollar index (DXY) so far this year, also historically benefits Bitcoin price. Often viewed as a "digital gold" or hedge against inflation, Bitcoin price has reached $117,000 twice in the past couple of hours, marking the highest level since August 23.
Arthur Hayes, BitMEX co-founder, suggests that the Fed's potential shift towards monetary policy, as indicated by advocacy for yield curve control (YCC), is good for Bitcoin price. This optimism is shared by Ash Crypto, who predicts that as more rate cuts happen, liquidity will flow into Bitcoin price and altcoins will increase.
However, it's important to note that economist Alex Kruger is ready for the dovish cut, despite markets already pricing the move in. Bitcoin price gained 1.5% on the day and almost 5% on the week, but had retreated slightly to $116,600 at the time of writing on Wednesday morning in Asia.
In conclusion, the anticipated Fed rate cut is seen as a positive development for the Bitcoin price and other risk assets. As the liquidity flows and major catalysts like ETF approval, pro-crypto administration, and regulatory clarity come into play, we may witness a parabolic Q4 rally in the crypto market.
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