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Federal Reserve Reduces Interest Rates by 0.25%
Bitcoin’s price rose Thursday afternoon following the Federal Reserve’s 25 basis-point rate cut, bringing its benchmark rate to 4.50%-4.75%. This decision, anticipated by many economists, comes after Bitcoin reached a record high above $76,000 post-election, fueled by Donald Trump’s presidential win. In a statement, the Fed acknowledged economic growth while noting inflation remains slightly above target. Fed Chair Jerome Powell is set to provide further insights in a press conference later today. Some experts speculate that Trump’s administration may press the Fed for continued rate cuts, especially as inflation cools. The rate decision also buoyed major U.S. equities, with the S&P 500 and Nasdaq climbing and the CBOE Volatility Index dropping, signaling reduced market uncertainty.
Detroit to Become Largest U.S. City Accepting Crypto for Taxes and Fees
Detroit is set to become the largest U.S. city to accept cryptocurrency payments, allowing residents to pay taxes and city fees via a platform managed by PayPal, city officials announced. Scheduled for mid-2025, the initiative is part of Detroit’s broader strategy to adopt innovative technologies, improve accessibility, and engage the unbanked population. The move follows similar state-level adoption in Colorado, Utah, and Louisiana, while cities like Miami and New York have shown interest in crypto but do not yet accept it for payments. Detroit also plans to invite blockchain entrepreneurs to propose applications for enhancing public services.
Coinbase Launches Wrapped Bitcoin on Solana to Expand DeFi Ecosystem
Coinbase has launched its wrapped Bitcoin asset, cbBTC, on Solana to expand Bitcoin’s role in the blockchain’s DeFi ecosystem. Backed 1:1 with Bitcoin, cbBTC is the first token issued by Coinbase on Solana and will integrate with multiple DeFi platforms, including Jupiter, Kamino Finance, and Raydium. Coinbase has already deployed about $10 million worth of cbBTC to Solana. This launch fills a gap left by the now-defunct soBTC and joins other wrapped BTC assets on Solana, such as tBTC and zBTC. Solana’s DeFi sector has surged in 2024, with total value locked (TVL) up 250% year-to-date, reaching $8.25 billion.
Trading Desk Insights
Bitcoin has successfully breached the significant $70,000 threshold this week, establishing new highs beyond $76,000, and now eyes are set on the $90,000 resistance level. This uptrend coincides with a broader rally in risk assets, fueled by the post-election sentiment that leans favorably towards a Republican-led administration, which typically champions deregulation and tax reductions. Nonetheless, there's a looming apprehension concerning the burgeoning federal deficit and heightened tariffs, raising alarms about potential inflationary pressures.
Cardano has led the altcoin pack, benefiting from a resurgence in DeFi interest that has also bolstered Ethereum and Solana. While the altcoin market presents a mixed picture, prominent coins like ADA, LINK, and SOL have notably outpaced others. In contrast, meme coins are currently consolidating after their sharp climbs, with some retracing more than others. The niche sector of PolitiFi coins, including MAGA, TREMP, and BODEN, have experienced a significant pullback.
On the ETF front, Bitcoin has recorded a monumental inflow of $1.374 billion in a single day, predominantly from Blackrock, while Ethereum has also seen substantial inflows totaling $79.7 million.
Market expectations are leaning heavily towards a rate cut in December, reinforced by the Federal Reserve's recent reduction by a quarter percentage point in November. However, there's a growing speculation of a potential pause in January, with market odds favoring a 67% probability of a December cut and a 33% likelihood of holding rates steady. Addressing speculation about his tenure, Federal Reserve Chairman Jerome Powell affirmed on Thursday that the president lacks the authority to dismiss or demote him, clearly stating he would not resign if requested, citing legal protections.
Crypto Charts
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