Cryptocurrency Bitcoin Hits New Peak: Soars Beyond May's Record Level
In a surprising turn of events, the recent urge by former President Trump for the Federal Reserve to cut interest rates by 3% has had a significant impact on the price of Bitcoin and other cryptocurrencies.
Following Trump's public call on July 9, 2025, Bitcoin's price surged sharply within 30 minutes, rising above $109,000 initially and then reaching new all-time highs above $112,000 and even $113,700 in the days following his statement.
This price movement is largely driven by market expectations that such a significant rate cut would increase liquidity and promote a "risk-on" environment, encouraging investment in higher-risk assets like cryptocurrencies. Lower interest rates typically reduce borrowing costs and increase the appeal of assets like Bitcoin as alternative investments, boosting demand and price.
Analysts noted that Trump's call highlights the burden of current refinancing costs on the economy and that a 3% cut could significantly inflate asset prices, not only for Bitcoin but also for stocks and gold. This is seen in expectations from The Kobeissi Letter, which suggests such a cut could push the S&P 500 to 7,000 and gold to $5,000, albeit with rising inflation risks.
Despite the enthusiasm in cryptocurrency markets, the broader market consensus remains skeptical about an imminent Fed rate cut, with CME futures pricing only about a 6.7% chance of a quarter-point cut soon, indicating that Trump's call may be more influential on market sentiment than immediate Fed policy.
This rally comes amid broader optimism about liquidity and institutional inflows into Bitcoin. Many altcoins have followed Bitcoin's rally, resulting in approximately $500 million worth of liquidations on a 24-hour scale across the market.
However, the volatility in the market has resulted in over $480 million in daily liquidations, with most of the liquidations coming from short positions. The volatility is attributed to the over-leveraged traders who have been affected by the market's instability.
In summary, Trump's call for a 3% rate cut has sparked a rapid Bitcoin price surge to over $113,000, setting new records. The market interprets potential rate cuts as supportive of risk assets, fueling demand in crypto. This rally comes amid broader optimism about liquidity and institutional inflows into Bitcoin. Nevertheless, the Federal Reserve is widely expected to hold rates steady in the near term, suggesting the rally is driven by sentiment rather than concrete policy shifts yet.
- The sharp increase in Bitcoin's price following Trump's call can be attributed to the reduced borrowing costs and increased appeal of Bitcoin as an alternative investment in a lower interest rate environment.
- Analysts suggest that if the Federal Reserve implements a 3% rate cut as proposed by Trump, it could not only boost the price of Bitcoin but also inflate the prices of stocks and gold, with rising inflation risks.
- While many altcoins have followed Bitcoin's rally, the volatility in the market has led to significant liquidations, especially from over-leveraged short positions, indicating the market's instability due to the uncertain Fed policy.
