Bitcoin Rises, XRP and Solana Surge. Why the Fed Rate Cut Is Driving an Altcoin Rally. — Barrons.com
By Callum KeownBitcoin, XRP, and Ethereum jumped early Thursday as crypto investors welcomed the Federal Reserve's first interest-rate reduction in nine months and digested the prospect of more cuts to come.The central bank cut rates by a quarter point Wednesday following recent weakness in the labor market. The Fed's updated "dot plot" of interest-rate expectations showed a further half-percentage point of cuts in 2025.Rate cuts tend to support cryptocurrencies as risky assets appear more attractive than lower-yielding safer investments, such as bonds.Bitcoin was trading at $117,310 early in the day, up 0.9% over the past 24 hours, according to CoinDesk data. It's been a strong September for the world's largest cryptocurrency, which is up 8% this month.Other digital assets enjoyed larger gains. Ethereum climbed 2% to $4,583 — the second-biggest crypto is now up 82% in the third quarter of the year, according to FactSet data. Popular altcoin XRP rose 3.8% to $3.13, taking its September gain to 10%, while Solana surged 5.4%."In crypto, the [Fed] decision could act as a catalyst for a new altcoin rally, as investors reposition toward higher-risk assets in anticipation of looser liquidity conditions," Markus Levin, co-founder of the blockchain network XYO, said.Crypto-related stocks were also higher, led by CoinDesk owner Bullish following its earnings late Wednesday. The digital asset platform soared 84% to $68 on its trading debut last month but has since fallen back to $54.35 as of Wednesday's close.But the stock pointed 10% higher at around $60 ahead of the open. The company's earnings and revenue in the second quarter beat expectations, while third-quarter guidance also topped estimates, according to FactSet data.Strategy, the large Bitcoin holder formerly known as MicroStrategy, was up 2%, while Coinbase and Robinhood Markets were also both up around 2%.Write to [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.