Bitcoin surged past $86,800, climbing nearly 5% as the Federal Reserve eased its balance sheet reduction, signaling looser financial conditions. The Fed announced it would slow the pace of reducing its $6.8 trillion balance sheet, capping the runoff of Treasury securities significantly. This decision was aimed at preventing disruptions in funding markets due to ongoing debt ceiling tensions, while also leaving interest rates unchanged at 4.25% to 4.5%. Jamie Coutts, Chief Crypto Analyst at Real Vision, noted that these financial signals could set the stage for a significant Bitcoin rally within 90 days, potentially leading to new all-time highs this quarter despite ongoing inflation and geopolitical risks. Market responses have shown that major cryptocurrencies like Bitcoin and Ethereum have experienced considerable gains, aligning with the Fed's decision and a trend of easing liquidity from the People's Bank of China, which may further stimulate risk assets.

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