Bitcoin posted its strongest daily gain in more than a month as expectations mounted that a Federal Reserve rate cut would boost demand for speculative assets.
The price of the largest digital currency rose 6.4% to $61,337 on Tuesday before paring gains, marking its biggest intraday gain since Aug. 8. Prices of smaller cryptocurrencies such as ether, Dogecoin and Solana also rose.
The market is pricing in a 55% implied chance that Fed policymakers will cut interest rates by 50 basis points on Wednesday, while traders are fully expecting a quarter-point cut.
Why Bitcoin Price Is Rising
“I think a combination of the increasing correlation between cryptocurrencies and traditional markets recently is driving Bitcoin’s price higher,” said Xiliang Tang, president of major trading firm Arbelos Markets.
Tang continued that MicroStrategy's announcement on Monday that it would sell convertible notes to buy more bitcoin is adding to the optimism.
Bitcoin price has been moving in a fairly narrow range since hitting a record high of around $74,000 in March.
“The market is still relatively weak, and it doesn’t take much of a move in either direction to see a move like this,” said Stephane Ouellette, co-founder and CEO of FRNT Financial.
