【Virtual Currency】The Federal Reserve's interest rate cut triggers a massive shakeup in the virtual currency market, with over 60,000 people liquidated.

The global financial markets are focused on the U.S. Federal Reserve's interest rate decision, which announced a 50 basis point reduction in the target range for the federal funds rate to 4.75%-5.00%. This is the first interest rate cut by the Federal Reserve since 2020, and the virtual currency market has also been affected.

As soon as the news broke, Bitcoin's price trajectory resembled a roller coaster. From the intra-day movement, it initially surged from $60,000 to $61,400 in a short time, then retraced its gains; around 8 AM, the price surged again by over 3% to above $62,000; by 9 PM, it surged to a high of $63,368. As of the time of publication, the gains had narrowed, with the latest trading price at $62,996.4. Ethereum also showed strength, with significant intra-day gains, breaking the $2,400/coin mark for the first time since September 15.

This round of price increases in virtual currencies, in addition to the loose monetary environment brought by the interest rate cut, is also significantly driven by the concentrated liquidation of short positions in the futures market. According to CoinGlass data, around 4:20 PM on September 19, a total of 68,501 people were liquidated in the last 24 hours, with a total liquidation amount of $204 million. Among the losing crowd, there were more investors who were bearish on the market. Previously, the futures contract rates in the market had long been negative, with many short sellers. When the market unexpectedly rose, short positions faced liquidation risks, and the pressure to close positions pushed asset prices even higher.

Driven by the drastic fluctuations in Bitcoin prices, blockchain concept stocks also performed strongly after the U.S. stock market opened, with MicroStrategy rising over 6% and Coinbase rising over 4%. Caroline Mullen, co-founder of the digital asset derivatives trading liquidity provider OrbitMarkets, stated that the positive start of the easing cycle is good news for risk assets, including Bitcoin. David Lawant, research director at cryptocurrency financial services company FalconX, pointed out that from now on, the trajectory of economic activity will become the most noteworthy factor, as the correlation between cryptocurrencies and traditional investments like stocks has recently surged, and macroeconomic variables are profoundly impacting the cryptocurrency market.