Cryptocurrency prices are surging on news that the U.S. Federal Reserve has lowered interest rates by 50-basis points.
The price of Bitcoin (BTC), the largest cryptocurrency by market capitalization, is up 4.5% and trading near $63,000 U.S.
Ethereum (ETH), the second biggest cryptocurrency, is up 5% and trading at $2,450 U.S.
Prices for several smaller cryptocurrencies are also up sharply, with Bitcoin Cash (BCH) rising 9% to $340 U.S.
The move higher comes after the U.S. central bank lowered interest rates by half a percentage point, its first reduction since the Covid-19 pandemic struck four years ago.
The Federal Reserve also signalled that more rate cuts are likely in coming months.
Lower interest rates are seen as beneficial to riskier assets such as stocks and cryptocurrencies.
The rise in crypto prices is mirroring a big move higher in U.S. equity markets, with the three major indices in America vaulting to new all-time highs a day after the U.S. rate cut was announced.
The blue-chip Dow Jones Industrial Average is up 500 points, or 1.20%, while the benchmark S&P 500 is up 1.64% and the Nasdaq Composite index that’s comprised largely of tech stocks is up more than 2%.
The increase in cryptocurrency prices marks a reversal for digital coins and tokens, which have largely been rangebound and trading sideways since early July.
The price of Bitcoin is now up 43% on the year.
