Bitcoin prices have risen following the U.S. Federal Reserve's decision to cut interest rates by 25 basis points for the third consecutive time in 2025. This cut is part of the Federal Reserve's strategy to support economic recovery, aimed at encouraging businesses and individuals to borrow at lower costs. This has a direct impact on riskier assets like Bitcoin, which typically gain value as institutional confidence increases.
This step is seen as a positive development for Bitcoin and the wider cryptocurrency market. Historically, low interest rates weaken the US dollar and make traditional assets like stocks and bonds less attractive. As a result, more buyers may prefer Bitcoin and other cryptocurrencies as an alternative store of value. Following the announcement of the interest rate cut, the price of Bitcoin briefly rose to $94,044, but long-term forecasts remain contingent on the asset's ability to surpass key resistance levels like $100,000.
Reactions from corporate and individual investors to the interest rate cut
The reaction to the 25 basis point interest rate cut was largely positive, especially among institutional buyers. As the attractiveness of the US dollar wanes, Bitcoin has become a more appealing investment. 'Smart wallets' are accumulating Bitcoin, indicating strong institutional confidence in the cryptocurrency space despite the overall market uncertainty. Open positions in Bitcoin have also significantly declined, reaching around $27.5 billion, suggesting that some buyers are focusing on Bitcoin as a hedge against inflation.
On the retail side (individuals), Bitcoin saw a short-term rise after the announcement. While some investors reacted with optimism, the typical 'buy the rumor, sell the news' effect led to quick sell-offs following the confirmation of the interest rate cut. However, this short-term volatility should not overshadow the long-term bullish outlook for Bitcoin, especially if the macroeconomic environment continues to support risk assets like cryptocurrencies.
Expert analysis
Cryptocurrency analyst, Michel van de Poppe, stated that Bitcoin 'is following an upward trend' and that the volatility that may result from the Federal Open Market Committee (FOMC) decision could create some uncertainty. He added that 'if [Bitcoin] stays above $91,800, it is very likely to continue rising towards $100,000 in the coming period, as it is on the verge of breaking the peaks and will start gaining momentum from there.'
