Lower interest rates will help reduce borrowing costs, stimulate consumer spending, and make traditional safe investments like bonds less attractive. The 'Trump trade' - the investment wave into the market following Donald Trump’s expected victory - drew attention on Tuesday night and continued into Wednesday, when the price #bitcoin☀️ surged to a record high due to early signs of a Republican comeback in the White House.
The price $BTC surged as the market began to price in Trump’s chances of winning, with key battleground states completing their vote counts faster than expected. On Wednesday, Bitcoin recorded its largest daily gain since March, reaching $75,560, up 9%.
While the market is anticipating a new growth wave next week, according to some experts, the decision of the Federal Open Market Committee (#FOMC ) regarding whether to cut or maintain the Federal Reserve's interest rates on Friday may not have much impact on Bitcoin prices. David Lawant, Director of Research at FalconX, commented: 'This decision will not have much impact, but there is a lot of macroeconomic uncertainty as we enter 2025 under Trump’s administration.'
Lawant believes that the uncertainties related to Trump’s trade policies and their impact on the crypto market, along with fiscal and monetary policy decisions, could have a greater influence. However, Pav Hundal, the chief market analyst at the crypto exchange Swyftx, argues that the Fed's decision 'is likely to have a stronger impact on Bitcoin than the outcome of the U.S. elections.'
Low interest rates may encourage investors to shift towards riskier assets for higher returns, including Bitcoin. Hundal believes that if the Fed cuts by 0.25 percentage points or more, this will drive Bitcoin prices to increase faster and potentially reach six figures by the end of the year.