Bitcoin Price Hits $116,527 as Fed Rate Cut Hopes Drive Gains

Bitcoin prices inched higher on Monday, extending last week’s momentum as traders grew confident that the U.S. Federal Reserve will cut interest rates this week. The leading cryptocurrency rose 0.7% to $116,527.3 by 02:01 ET (06:01 GMT), building on a 5% jump from the prior week.

The optimism comes as markets price in a 99.6% chance of a 25-basis-point rate cut, according to CME FedWatch. Lower interest rates typically boost speculative assets like cryptocurrencies by injecting more liquidity into markets. However, investor caution persists, with Fed Chair Jerome Powell remaining non-committal on a longer-term easing strategy due to persistent inflation concerns.

Bitcoin’s recent rebound helped it recover from sharp mid-August to early-September losses, though it still lags behind its August highs. A key headwind has been growing uncertainty around corporate treasuries. Strategy (formerly MicroStrategy), one of the largest corporate Bitcoin holders, was recently rejected from inclusion in the S&P 500 index, raising questions about the sustainability of corporate treasury-driven buying. Analysts at JPMorgan warned that limited index inclusion could undermine the long-term outlook for this strategy.

Despite Bitcoin’s gains, broader crypto markets weakened. Ethereum, the second-largest crypto, traded flat at $4,669.36, while XRP slipped 1.1% to $3.0581. Solana dropped 1.4% and Cardano fell 2.5%. Meme tokens also struggled, with Dogecoin losing 3.7% and $TRUMP down 1.3%.

Overall, the crypto market remains in a cautious phase, balancing optimism over monetary easing with concerns about long-term sustainability. Traders await the Fed’s rate decision later this week, which could set the tone for the next major move in Bitcoin and altcoin prices.