Cryptocurrency markets rose by 10 percent last week as the U.S. Federal Reserve cut interest rates by 50 basis points. This was the first rate cut executed by the Fed in four years.
The federal funds rate was reduced from a target range of 5.25 percent-5.50 percent to 4.75 percent-5.00 percent in response to progress towards the Fed’s two percent inflation target since its previous meeting in July.
Bitcoin increased by 6 percent, returning to the level of $64,000 USD – prices last seen on August 26 of this year. The bitcoin ETF spot also recorded an inflow of $412 million USD last week.
Interestingly, the published “dot-plot,” a graph depicting the Fed’s estimates of long-term interest rates, showed that officials believe the federal fund rate will fall within a target range of 4.25 percent-4.50 percent by year’s end, 50 basis points below the current target range. This suggests further rate cuts will happen in November and December Fed meetings.
According to CME FedWatch, the market now forecasts a year-end target range of 4.00 percent-4.25 percent for the federal funds rate, indicating a drop of 75 basis points from current levels.
Focus will be on Friday’s personal consumption expenditures inflation data. PCE is the Fed’s preferred inflation indicator. A value lower than forecast may push markets to further rise in anticipation of potentially deeper interest rate cuts in the forthcoming months.
Donald Trump made a historical bitcoin transaction last week, becoming the first U.S. president to make a payment using cryptocurrency.
President Trump visited PubKey, a New York Bitcoin-themed bar last Wednesday, where he bought burgers for customers using bitcoin. Despite being a previous critic and calling bitcoin a “fraud,” Trump publicly supported the cryptocurrency industry during his presidency. This historic burger purchase is seen as further evidence of his change of heart.
The Kingdom of Bhutan was revealed to be a major bitcoin holder. Arkham Intelligence first publicly identified Bitcoin addresses belonging to the country’s sovereign investment arm, Druk Holding & Investments, showcasing assets worth 13,000 bitcoins, approximately $813 million USD at current market prices.
This means Bhutan currently holds more bitcoins than some major publicly traded bitcoin mining companies like Riot Platforms and Cleanspark, along with companies like Tesla and Block that hold bitcoins as reserve assets.
Bhutan’s bitcoin reserves are also over two times larger than El Salvador, the first country to make bitcoin legal tender in 2021. Despite Bhutan only having about 12 percent of El Salvador’s population, its bitcoin holdings currently stand at $335 million USD.
Unlike most governments, Bhutan’s bitcoin assets come not from seized assets but from bitcoin mining operations, which have dramatically increased since early 2023, according to a post on Arkham.
One of Germany’s largest banks, Commerzbank, announced last week that it plans to provide its corporate clients with professional cryptocurrency custody and trading services in collaboration with Deutsche Börse subsidiary, Crypto Finance.
The joint service will initially focus on bitcoin and ethereum.
Commerzbank will manage the deposit of digital assets, while Crypto Finance will ensure their secure trading.
The partnership with Commerzbank is another success for Crypto Finance, which announced a similar partnership with Swiss bank Zürcher Kantonalbank earlier this month.
Simon Peters, eToro cryptocurrency analyst.
Source: https://managerplus.pl/donald-trump-dokonuje-historycznej-transakcji-bitcoinowej-96433
