Bitcoin scales new peak with Fed rate cuts looking more likely
There is an inverse relation between policy rates cuts by the US Fed and crypto prices since lower interest rates impact the appeal of traditional savings instruments and nudge investors towards more risky assets such as cryptocurrency.
Kolkata: With the US Fed increasingly looking more likely for cut rates, the crypt markets are on a roll. Bitcoin prices hit fresh peaks on August 14 as the air became thick with rising expectations of a cut in policy rates. The rise was reported in the trading in Asia with 0.9% appreciation to reach $124,002.49, said reports. The earlier peak of Bitcoin was recorded in July when it touched $123,000.
According to reports, Ether, the second biggest cryptocurrency rose to $4,780.04. It is the highest level since 2021. Incidentally, Bitcoin has surged nearly 32% so far in 2025 alone.
Analysts observed a couple of tailwinds to the crypto run. One, the increasing likelihood of interest rate cuts by the US Fed and two, the Trump government's move to create a climate conducive to the investment in crypto assets. Crypto prices rose for a prolonged period after Donald Trump came in power. He had promised to turn the US into the crypto powerhouse of the world.
Can breach $1,50,000
Analysts saw life in the current bull run and spoke of possibility of the prices breaching the $1,50,000 level. "Technically a sustained break above $125k could propel BTC to $150,000," Tony Sycamore, IG market analyst wrote in a note.
Data from CoinMarketCap suggest that the crypto industry's market cap has ballooned by more than 167% since November 2024, when Donald Trump was elected at the US President.
Push from White House
In the first week of March Trump signed an order to establish a strategic Bitcoin reserve and a US Digital Asset Stockpile. The Strategic Bitcoin Reserve will be capitalised with bitcoin owned by the Department of Treasury. Another decision was that the US will not sell bitcoin deposited into this reserve, which will constitute a reserve asset for the country.
Another recent push was from another executive order from Trump. It is expected to facilitate access to the asset class in 401(k) retirement accounts. (401(k) plan is a company-sponsored retirement account in which employees can contribute a percentage of their income. Employers often match parts of the same and is somewhat similar to Indian EPF accounts.)
The Indian government, the finance ministry and Reserve Bank do not encourage investment in crypto assets since they think they are too risky and gains frm this industry can be used for subversive purposes.
Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.