Catenaa, Thursday, December 19, 2024 –The US Federal Reserve yesterday reduced its benchmark federal funds rate by 25 basis points, lowering it to a range of 4.25% to 4.50%, as Bitcoin rallied to a new all-time high of over $108,000.
However, share prices slumped on the announcement, the BBC reported yesterday.
The Federal Open Market Committee’s (FOMC) decision follows prior rate cuts in November and September, reflecting eased labor market conditions and progress on inflation.
However, the Fed signaled a cautious approach toward future adjustments, emphasizing ongoing assessments of economic data.
Bitcoin reacted positively to the announcement, with institutional interest driving futures market activity to record levels.
The CME Bitcoin futures open interest surged to 113,480 BTC, with contango widening to its highest since late 2023. Analysts noted strong optimism in spot markets but observed hedging activity in options markets, indicating cautious sentiment amid the rally.
Regulatory developments provided additional support for Bitcoin’s rise. The Financial Accounting Standards Board’s adoption of fair value accounting for digital assets allows companies to record gains directly in net income, bolstering institutional demand.
Acording to reports, equities also experienced mixed reactions. The Nasdaq Composite rose 2.23%, while the S&P 500 and Dow saw declines. Gold prices fell 1.52% to $2,606.43 per ounce, reflecting shifting market dynamics post-Fed decision.
