On Wednesday, September 18, the Federal Reserve announced after its FOMC meeting that it would lower the target range for the federal funds rate from 5.25%-5.50% to 4.75%-5.00%, a reduction of 50 basis points.

In response to this, Jeffrey Ding, Chief Analyst at HashKey Group, stated: “The darkest hour before dawn has passed, and the starting point of a new tidal market cycle has arrived. The Federal Reserve’s 50 basis point rate cut signifies significant concern about the current economic environment, necessitating a larger reduction to kick-start a rate-cutting cycle. Recently, global economies have faced liquidity challenges, and this rate cut injects new vitality into global financial markets.”

Bitcoin, as the “digital gold” of the new era, has performed strongly in this context, with short-term surges surpassing $62,000. However, it’s not just Bitcoin benefiting from this; the entire cryptocurrency market is expected to experience a new cycle of growth under the loose monetary policy. It’s important to note that unlike traditional markets, Bitcoin’s performance is more influenced by U.S. dollar liquidity than by changes in the U.S. economic outlook. This means that in the forthcoming loose monetary environment, Bitcoin could continue to be a preferred asset for investors seeking protection against inflation and safe-haven options.

As the rate-cut cycle progresses, the crypto market may enter a prolonged period of growth. Although volatility in the market remains, this round of cryptocurrency momentum could attract more capital and innovation, driving the entire crypto ecosystem into a new phase of development.