Bitcoin beats the Fed to $116 as market anticipates 25 basis point cut

Bitcoin's price reached $116.000 on Wednesday, as the crypto market surpassed $4,14 trillion in market capitalization, anticipating a possible 25 basis point interest rate cut by the Federal Reserve.

This Wednesday, global markets are focused on the U.S. Federal Reserve (Fed) meeting, where a 25 basis point interest rate cut is expected. 

The decision comes at a time of high macroeconomic sensitivity, with the S&P 500 hitting new highs and alternative assets showing signs of anticipation. Among them, Bitcoin has stood out with a rise of 3,86% in the last seven days, reaching a price of $116.326, at the time of writing this article, while the total market capitalization of Crypto market has surpassed $4,14 trillionThese movements suggest that investors are repositioning their portfolios in anticipation of a possible shift in monetary policy.

The expectation of lower rates comes amid persistent inflationary pressures and a technological acceleration driven by artificial intelligence, and hard assets like Bitcoin have begun to reflect a new cycle. The prevailing narrative is clear: in a “hot” environment, where liquidity could increase and the cost of money decrease, scarce and decentralized assets gain appeal. Bitcoin, with a limited supply of 21 million units and a growing institutional presence, seems to be reading the context accurately.

Bitcoin and the crypto market react: rising prices and growing market capitalization

Over the past week, Bitcoin has maintained an upward trajectory, with a trading range that has oscillated between $104.866 and $117.202. This performance not only reflects renewed investor interest but also an early reading of the potential effects of the rate cut. 

At the same time, the crypto market as a whole has gained ground. According to data from the CoinGecko platform, the total cryptocurrency market capitalization has surpassed $4,14 trillion, with more than 17.900 active coins and a daily trading volume close to $150.000 billion. This expansion is not limited to Bitcoin; Ethereum and other altcoins have also shown signs of recovery.

The correlation between monetary policy and digital assets has become more evident in recent cycles. Each time the Fed has adopted a more accommodative stance, alternative assets have responded strongly. 

In this case, the Fed's anticipation of a rate cut has coincided with a week of intense activity in the US Congress, where Bitcoin was introduced as part of a legislative proposal led by Senator Cynthia Lummis. As reported by this outlet, the initiative, called Bitcoin Act., seeks to establish a strategic reserve of BTC and have the government acquire 1 million units of this cryptocurrency within 5 years, which adds an institutional layer to the debate about its role in the future economy.

This dual push—monetary and political—has reinforced the narrative of Bitcoin as a strategic asset. This isn't just speculation, but a reconfiguration of long-term positioning. And market data confirms this, with thousands of users adding BTC to their portfolios, as part of an accumulation trend that transcends short-term volatility.

Experts anticipate volatility and opportunity following the Fed's decision

Although the market is currently showing signs of optimism, analysts warn that the transition will not be linearJP Morgan and other Wall Street players anticipate a final correction before a new rally consolidates. estimates They predict possible Bitcoin pullbacks to $104.000 or even $92.000, in what they describe as a "technical shakeout" before a reversal. This pattern, according to experts, has been repeated in previous cycles: first fear, then the rally.

However, the expected volatility in the crypto market doesn't contradict the underlying thesis. On the contrary, it reinforces it. In an environment where interest rates are falling while inflation and technological disruption remain high, assets like Bitcoin tend to absorb excess liquidity and channel it into new valuations. Gold has followed a similar path, suggesting that investors are seeking refuge in assets uncorrelated with traditional markets.

Furthermore, the political context adds complexity. Bitcoin's presentation on Capitol Hill, alongside legislators and industry leaders, seeks not only regulatory support, but also institutional legitimacy. 

The proposal for a strategic Bitcoin reserve in the United States, the world's largest economy, presents a long-term vision that could alter the perception of the asset in more conservative financial circles. If this narrative consolidates, Bitcoin could definitively move from being a speculative instrument to a structural component in institutional portfolios.

This scenario, although fraught with uncertainty, offers clear opportunities for those who understand the dynamics of cycles. The key, according to analysts, is to differentiate between short-term noise and structural signals. The Fed meeting, in this sense, will not only define immediate monetary policy but also the market tone for the coming months.

The beginning of a new strategic cycle

The upcoming Federal Reserve meeting represents a defining moment for financial markets. If the long-awaited interest rate cut is finally confirmed, Bitcoin and the entire crypto ecosystem could experience a significant boost. This would reinforce its role as a strategic option within a scenario of looser monetary policy. 

Ultimately, Bitcoin's recent price performance, coupled with a sustained increase in market capitalization and growing support from institutional investors, reflects a clear repositioning toward what could be a new bullish cycle.