Bitcoin News Update: Federal Reserve's Shift Spurs Surge in Crypto and Stocks, Yet Dangers Remain
- Fed rate cuts boost liquidity in crypto and stock markets, with Bitcoin hitting $114,000 amid accommodative policy expectations. - AGNC reports 10.6% Q3 return as mortgage-backed securities outperform treasuries, reflecting renewed risk appetite. - BlackRock's $107.8M Bitcoin ETF inflow and 2,854 BTC deposit into Coinbase highlight institutional adoption of regulated crypto custody. - Bitcoin treasuries see 99% inflow drop, while Ethereum ETFs face outflows, signaling divergent crypto investor sentiment.
Expectations of interest rate reductions by the Federal Reserve have triggered a wave of liquidity in both the crypto and stock markets, with
Meanwhile, Bitcoin surged to $114,000 in early October, up 1.5%, amid speculation that Fed rate cuts would prompt investors to shift funds from low-yield money market products into riskier assets,
The Fed’s more accommodative approach has also lifted sentiment across broader markets.
Bitcoin mining firms are also benefiting from increased liquidity. HIVE Digital Technologies has scaled its mining capacity in Paraguay to 22 EH/s, utilizing hydroelectric energy and aiming for 35 EH/s by 2026, according to
Still, not all signals are positive. Inflows into Bitcoin treasuries have dropped by 99%, leading analysts to advise dollar-cost averaging and diversifying with gold and short-term bonds to manage risk, according to
The Fed’s policy changes have also impacted niche tokens. World Liberty Financial (WLFI), a Trump-affiliated token, jumped 12% in one day, outperforming both Bitcoin and Ethereum, though its 70% drop from its peak highlights the speculative risks, according to a
As the Fed signals further rate cuts, investors remain cautiously hopeful. AGNC’s CFO Bernice Bell stated that reduced funding costs and capital deployment are expected to provide a “moderate tailwind” for net spread income, as previously mentioned by Seeking Alpha, while crypto analysts point to the possibility of trillions in liquidity entering digital assets. With Bitcoin testing $115,000 and T-Mobile shares nearing $229, the connection between easier monetary policy and asset performance highlights a wider shift of capital in pursuit of better returns.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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