Bitcoin rose the most in more than a month as expectations increase that a reduction in borrowing rates by the Federal Reserve will boost demand for speculative assets.
The largest digital currency gained as much as 6.4% to $61,337 on Tuesday, the biggest intraday increase since August 8. Smaller cryptocurrencies such as Ether, Dogecoin and Solana also rallied.
The market-implied odds that Fed policymakers announce a 50-basis-point rate reduction on Wednesday were around 55%. Traders have fully priced in a full quarter-point worth of easing.
“I think a combination of increasing correlation between crypto and traditional markets recently” is driving the price of Bitcoin higher, said Shiliang Tang, president of principal trading firm Arbelos Markets.
MicroStrategy Inc.’s announcement Monday to sell convertible notes to purchase more Bitcoin is adding to optimism, Tang said.
Bitcoin has been trading within a fairly narrow range since setting a record high of almost $74,000 in March.
“The market remains relatively thin and it does not take incrementally much on either side to see a move like this,” said Stephane Ouellette, co-founder and chief executive officer of FRNT Financial.
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