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Federal Reserve Chairman Jerome Powell said the Federal Open Market Committee would cut the federal funds rate by 25 basis points.
The rate cut comes as Bitcoin prices hit record highs following the election of Donald Trump.
Ethereum and Solana also gained 7% and 4% respectively following the rate cut.
Bitcoin (BTC) and the broader cryptocurrency market continue to rise after the Federal Reserve (Fed) cut interest rates by 25 basis points on Thursday.
Bitcoin trades near $76,000 after Fed rate cut
The Federal Reserve cut interest rates by 25 basis points on Thursday, a decision aimed at maintaining flexibility as officials grapple with a slowing labor market and falling inflation.
The cut brings the benchmark rate to 4.50% to 4.75%, following a 50 basis point cut in early September.
Federal Reserve Chairman Jerome Powell held a press conference after the Federal Open Market Committee (FOMC) meeting and said he was pleased with economic activity so far.
“If the economy remains strong and inflation cannot move sustainably towards 2%, we can reduce policy restrictions more slowly. If the labor market weakens unexpectedly, or inflation falls faster than expected, we can act more quickly,”
The cryptocurrency market has remained profitable following the Federal Reserve’s decision to lower interest rates.
Historically, Bitcoin and cryptocurrency markets have responded positively to low interest rate environments. When the Federal Reserve cuts interest rates, investors typically become more interested in risk assets, causing the price of cryptocurrencies such as Bitcoin to surge.
Currently, Bitcoin is trading slightly below its recent all-time highs following Donald Trump’s victory in the recently concluded US presidential election.
Other top crypto assets have risen alongside Bitcoin as the market continues its upward trend. Ethereum rose 7.3% following the announcement, while Solana also gained 3.5%.
However, Dogecoin fell more than 3% amid a 15% gain in the meme sector. Other categories extending gains include artificial intelligence (up 13.5%) and DeFi (up 18%).
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