(Kitco News) – The post-election excitement extended for another day across financial markets as cryptos, stocks, and gold all rallied higher, receiving an added boost from the Federal Reserve, which lowered interest rates by 25 basis points on Thursday afternoon.
“In the wake of Donald Trump's definitive win in the presidential elections, we've seen a sweeping rally across various asset classes,” said analysts at Secure Digital Markets. They noted that interest rate cuts are “traditionally favorable to assets like BTC, as [they] tend to weaken the dollar and boost market liquidity.”
“Elsewhere, the Bank of England has moved decisively, with an 8-1 vote favoring a 25 basis point rate cut, bringing the key rate down to 4.75%,” they added. “This adjustment marks the central bank’s second reduction this year, following the initiation of its easing cycle in August.”
With interest rate cuts seen as a return to ‘easy money policies’ by many investors, they’ve wasted no time jumping back into the markets after the days of volatility that was predicted until the winner was known lasted only until the morning after the election.
Following Wednesday’s bullish moves higher, traders kept the party going on Thursday, juiced by the Fed’s decision. At the closing bell, the S&P and Nasdaq finished up 0.74% and 1.51%, respectively, while the Dow was flat.
Gold also course-corrected from yesterday’s declines and rallied back above $2,700. At the time of writing, spot gold trades at $2,706.10/oz for an increase of 1.77% on the session.
Data provided by TradingView shows that Bitcoin (BTC) hit a low of $74,500 overnight after the initial election boost subsided, but bulls were reenergized following the rate cut announcement and pushed King Crypto to a new all-time high of $77,000 in the afternoon.
BTC/USD Chart by TradingView
Bull efforts have been aided by heavy inflows into spot Bitcoin exchange-traded funds (ETFs), with BlackRock’s IBIT seeing its largest daily trading volume of $4.1 billion on Wednesday.
At the time of writing, Bitcoin trades at $75,945, a decrease of 0.1% on the 24-hour chart.
Favorable tailwinds point to an extended rally
“The Fed’s 25 bps rate cut introduces an economic boost favorable to risk assets like Bitcoin,” said Matt Mena, Crypto Research Strategist at 21Shares.
“Combined with Trump’s pro-crypto policies, this creates a supportive macro environment for Bitcoin,” he added. “With clearer regulations and a pro-crypto stance, this economic backdrop offers strong potential for Bitcoin’s continued growth, backed by both solid fundamentals and a favorable political landscape.”
He noted that the favorable turn for Bitcoin is already present in several areas.
“Bitcoin has been lagging behind stocks for months,” Mena highlighted. “BTC reached a new all-time high back in March, but until this week, it continued to trail behind the stock market.”
“The stock market, particularly the S&P 500 and NASDAQ, was regularly setting new highs, at times even daily, reaching record-breaking streaks,” he added. “Meanwhile, BTC remained sluggish.”
“However, this week saw two key catalysts: the anticipation of a 25 bps rate cut and the presidential election outcome, where Trump was heavily favored to win by a landslide on prediction markets like Polymarket and Kalshi,” he said. “On the back of these events, BTC surged to new all-time highs and continues to set fresh records minute by minute.”
Mena highlighted that “Trump’s pledge to never sell the Bitcoin held by the US government highlights its strength as a store of value. Additionally, his consideration of establishing a strategic Bitcoin reserve further reinforces Bitcoin’s status as a hedge asset, especially in the anticipated lower rate environment.”
“Together, these elements suggest a pathway for sustained growth for Bitcoin, bolstered by institutional interest, regulatory clarity, and favorable economic conditions,” he concluded.
Veteran trader Peter Brandt highlighted that “Bitcoin is now in the sweet spot of the bull market halving cycle that should top in the $130k to $150K range next Aug/Sep,” before noting that he “measures cycles differently than most.”
And market analyst CryptosRus said that based on a comparison with previous cycles, Bitcoin could hit $100,000 by the start of 2025.
According to this, we should see $BTC hit $100,000+ in the next 52-58 days [around Dec 28, 2024 - Jan 3, 2025]
This lines up with my prediction that Bitcoin will hit 6-figures by end of year ?
Chart: Crypto Rover pic.twitter.com/JNrchaE6Ue— CryptosRus (@CryptosR_Us) November 7, 2024
Altcoin uptrend continues
The bullish rally for altcoins extended another day with all but a dozen tokens in the top 200 recording gains.
Daily cryptocurrency market performance. Source: Coin360
Goatseus Maximus (GOAT) led the field for a second day with a gain of 21.1%, followed by increases of 19.3% and 18.7% for Oasis (ROSE) and Maker (MKR), respectively. Mask Network (MASK) led the losers with a decline of 3.8%, while Uniswap (UNI) lost 3.5% and Helium (HNT) fell 2.5%.
The overall cryptocurrency market cap now stands at $2.57 trillion, and Bitcoin’s dominance rate is 58.8%.
