Bitcoin Soars on Fed Policy Shift
Bitcoin's price surge to $80,311.25 is significant because it is now driven by changes in Federal Reserve policy rather than short squeezes.
The cryptocurrency has pushed above $80,000 three times since August 25 but failed twice. Today's rally marks the first time where a change in interest rate expectations is behind the price movement, rather than forced buying from short covering.
Circulating supply stands at 20.078 million coins, putting market capitalization at roughly $1.61 trillion. Despite this, Bitcoin is still 36.4% below its all-time high and 39% above its 52-week low.
The Federal Reserve's decision to hold rates steady in September has a direct impact on Bitcoin's price as it affects the opportunity cost of holding a non-yielding asset. A 25-basis-point hike widens the spread between Bitcoin and cash, while a hold narrows it.