- The crypto market rallied after an aggressive Fed rate cut.
- Trump became the first former president to transact using BTC.
The crypto market reacted positively to the first Fed rate cut in four years.
On the 18th of September, the U.S. Fed dropped interest rates by 0.50% (50 basis points), a surprisingly aggressive move that caught most economists, who expected a 25 bps cut, off-guard.
Following the Fed pivot, Bitcoin [BTC] netted 2.3% gains during the intraday trading session on Wednesday. On the 19th of September, during early Asian hours, BTC climbed higher to $62.5K.
Source: Coin360
At the time of writing, the asset was valued at $62.1K, with notable gains across the sector. Ethereum [ETH] was up 5% in the past 24 hours.
But Solana [SOL] had the highest daily gains among the major assets, with nearly 6.4% gains over the same period.
However, market pundits remained cautious, citing that the Fed’s jumbo cut could signal a slowing economy that could unnerve risk assets in the short term.
BitMEX’s founder Arthur Hayes called the aggressive cut a ‘nuclear catastrophe for financial markets’ that could lead to muted prices after two days.
He further warned that Friday’s BoJ (Bank of Japan) decision could be another factor determining BTC’s next price direction. Hayes noted,
“A weak JPY will mean stronger BTC and vice versa.”
However, Antony Pompiliano, a BTC investor, claimed that recession worries only mattered to short-term speculators. For long-term investors, the Fed rate cuts were bullish for BTC.
Trump becomes the first president to transact using BTC
On the 18th of September, Donald Trump, former US president, stopped at the famous New York PubKey bar and paid using BTC.
He bought food and drinks for supporters at the joint and settled the bill through BTC. PubKey owner Thomas Pacchia termed the action as “history.”
“The first transaction by a president on the Bitcoin protocol. History!”
Unlike his first stint at the White House, Trump has become pro-BTC and even announced plans to establish it as a strategic reserve asset if elected president.
As a result, BTC price action has also become increasingly correlated with Trump’s odds of winning the 2024 US elections.
Source: Polymarket
At press time, chances of a Trump win stood at 47%, as Harris dominated with a 5-point lead on the prediction site Polymarket.
Wisdom Tree unveils RWA platform on Ethereum
Finally, Wisdom Tree, an asset manager with $110 billion of assets under management, has unveiled an RWA (real-world asset) tokenization platform that will run on Ethereum.
The product, called Wisdom Tree Connect, will allow integration between TradFi and DeFi, per the firm. Will Peck, Head of Digital Assets at WisdomTree, said,
“With increasing interest in tokenized real-world assets, WisdomTree Connect … will provide access to digital funds to on-chain firms without leaving the ecosystem.”
Wisdom Tree will join other asset managers like BlackRock and Franklin Templeton, which have similar products aimed at providing yield-bearing products for crypto firms seeking exposure to US treasury bonds as a reserve.
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