Bitcoin trimmed gains from a rally sparked by expectations of lower borrowing costs from the Federal Reserve, which boosted demand for speculative assets.
The largest cryptocurrency was trading near $60,000 at 8:50 a.m. in Singapore on Wednesday, after surging as much as 6.4%—its biggest intraday jump since August 8—to exceed $61,000 during U.S. trading hours on Tuesday.
The market was pricing in a 55% chance that the Fed would announce a 50-basis-point rate cut on Wednesday, with traders fully factoring in a quarter-point reduction.
“Increased correlation between crypto and traditional markets recently” is likely contributing to Bitcoin’s price rise, said Shiliang Tang, president of the principal trading firm Arbelos Markets.
Further optimism was fueled by MicroStrategy Inc.’s Monday announcement of a sale of convertible notes to buy more Bitcoin, Tang added.
Bitcoin has been trading in a relatively tight range since reaching an all-time high of nearly $74,000 in March.
“The market remains relatively thin, so it doesn’t take much to trigger a move like this,” noted Stephane Ouellette, co-founder and CEO of FRNT Financial.
