Bitcoin News Today: Bitcoin ETFs Drive $117K Surge as Fed Eases Policy

The Federal Reserve's monetary policy decisions have emerged as a pivotal factor shaping Bitcoin's price trajectory, as markets grapple with the implications of rate cuts and shifting liquidity dynamics. Recent actions by the Fed, including a 25-basis-point reduction in its benchmark interest rate to 4%-4.25% in early 2025, have fueled speculation about further easing later in the year. This has led to a surge in Bitcoin's price, which has climbed to over $117,000, driven by reduced borrowing costs and a rotation into risk assets [3]. Analysts note that Bitcoin's performance is closely tied to the U.S. dollar's weakness, which has lost roughly 10% of its value this year amid inflationary pressures and de-dollarization trends [1].

Institutional demand has amplified Bitcoin's rally, with ETF inflows reaching $642 million in a single week-the highest since July 2025. Spot Bitcoin ETFs now hold 1.296 million BTC, accounting for nearly 6.5% of the total supply [9]. This structural demand, coupled with rising corporate treasury purchases, has created a sustained bid for Bitcoin, even as short-term technical indicators suggest potential consolidation. For instance, a golden cross on Bitcoin's four-hour chart-a bullish signal-has historically been followed by price retests of the 200-period moving average before resuming upward trends [2]. Analysts project that Bitcoin could test $118,500 if this pattern holds, with a decisive break above $119,000 potentially targeting $120,000–$121,000 [3].

Global liquidity trends further underscore Bitcoin's resilience. A Vector Autoregression (VAR) model indicates that Bitcoin's price responds to liquidity shocks with a peak impact of 2% three months after the initial event [4]. The Fed's rate cuts, alongside aggressive easing by other central banks, have accelerated global liquidity growth, with G20 banks implementing 54 rate cuts in the past 12 months-the highest since 2008/09 [5]. This environment has supported Bitcoin's correlation with gold, which has also surged to record highs as investors seek hedges against dollar debasement [1].

The interplay between macroeconomic factors and Bitcoin's price is evident in historical data. During periods of geopolitical tension, such as the Middle East conflicts in 2025, Bitcoin has historically outperformed equities, averaging a 31.2% gain 50 days post-event [5]. The Fed's delayed rate cuts and the dollar's erosion as a safe haven have reinforced this trend, with Bitcoin's realized volatility remaining below major equity indices despite heightened uncertainty [5].

Looking ahead, the Fed's potential July rate cuts and continued global liquidity expansion are seen as bullish catalysts. Bitcoin's MVRV Z-score remains neutral at 2, indicating room for further appreciation without hitting overvalued territory [6]. Meanwhile, the launch of options markets on Bitcoin ETFs, such as iShares Bitcoin Trust (IBIT), has deepened liquidity and institutional participation, with $90 billion in open interest eclipsing futures markets [7]. These developments highlight a maturing market structure where Bitcoin's volatility is increasingly tied to traditional financial instruments [7].

[1] Forbes Digital Assets (https://www.forbes.com/sites/digital-assets/2025/10/07/serious-us-dollar-fed-warning-triggers-sudden-bitcoin-and-gold-all-time-high-price-surge/)

[2] Finbold (https://finbold.com/heres-what-next-for-bitcoin-after-the-feds-rate-cut/)

[3] CoinPedia.org (https://coinpedia.org/price-analysis/bitcoin-ethereum-xrp-price-prediction-after-fed-rate-cut/)

[4] Capital Wars (https://capitalwars.substack.com/p/impact-of-global-liquidity-on-bitcoin)

[5] Bitwise Investments (https://bitwiseinvestments.eu/blog/regular-updates/the-global-liquidity-pulse-implications-for-bitcoin-in-a-slowing-us-economy-07-2025/)

[6] Forbes Digital Assets (https://www.forbes.com/sites/digital-assets/2025/02/28/bitcoin-and-global-liquidity-how-money-supply-shapes-btcs-price/)

[7] Yahoo Finance (https://finance.yahoo.com/news/ibit-options-market-fuels-bitcoin-114231362.html)

[9] AnalyticsInsight (https://www.analyticsinsight.net/cryptocurrency-analytics-insight/5-major-changes-bitcoin-etfs-have-caused-in-the-market)