Bitcoin News Today: Fed's Dovish Pivot Sends Bitcoin Surging Past $124K

Bitcoin Surges to $124,000 as Fed Signals Dovish Stance

Bitcoin (BTC) briefly surpassed $124,000 following the release of the U.S. Federal Reserve's September FOMC minutes, which indicated a willingness to implement further rate cuts in 2025. The cryptocurrency settled around $123,500 after the initial surge, reflecting renewed optimism among investors anticipating looser monetary policy. The move came as Fed officials signaled a shift toward easing, with the central bank acknowledging heightened downside risks to employment and a slowing labor market [1].

The FOMC minutes revealed that most participants deemed it "appropriate to ease policy further" over the remainder of the year, with a median estimate of two additional 25-basis-point (bps) cuts expected by year-end. These cuts, likely to occur at the October 29 and December meetings, align with market expectations, as the CME FedWatch tool showed a 92.5% probability of a 25-bps cut in October. The dovish tone contrasted with earlier caution, as the Fed had previously signaled a more restrained approach to rate reductions amid persistent inflation concerns [1].

Bitcoin's price reaction was immediate. TradingView data showed the asset briefly spiking above $124,000 in response to the minutes, driven by expectations of increased liquidity and reduced borrowing costs. The broader crypto market capitalization remained above $4.19 trillion, with risk-on sentiment bolstered by the Fed's pivot. Analysts attributed the rally to Bitcoin's status as a hedge against inflation and a beneficiary of lower real yields, which historically have supported risk assets [2].

However, the Fed's dual mandate-balancing inflation control and employment stability-remains a point of contention. While most officials prioritized addressing labor market weaknesses, others expressed caution about prematurely easing policy, fearing it could reignite inflation. Fed Governor Stephen Miran, the sole dissenter in favor of a 50-bps cut in September, emphasized his "sanguine" outlook on inflation, whereas Kansas City Fed President Jeffrey Schmid argued inflation remains "too high." This divide underscores the central bank's challenge in navigating a complex macroeconomic landscape [1].

The market's focus now turns to Fed Chair Jerome Powell's upcoming remarks and the October FOMC meeting. With the U.S. government shutdown delaying key economic data releases, Powell's statements will serve as the primary policy signal for investors. The outcome could influence Bitcoin's trajectory, as further rate cuts or a hawkish pivot may trigger volatility. Meanwhile, the cryptocurrency's performance is also being shaped by regulatory developments, including the anticipated approval of spot ETFs and evolving institutional adoption [2].

[1] Coingape (https://coingape.com/fomc-minutes-signal-fed-open-to-more-rate-cuts-this-year-bitcoin-bounces/)

[2] Yahoo Finance (https://finance.yahoo.com/news/fomc-news-members-ease-policy-150416155.html)