Bitcoin had a strong upward trajectory this week, and for the second day running, its gains have been sustained above the key $90,000 mark. As of Tuesday, the world’s most valuable cryptocurrency went up 1.9% to $92,247 from the low during the session at $90,407. That built on a strong Monday, when Bitcoin gained 0.75%, bringing the digital currency another step closer to its all-time high of $93,483. The cryptocurrency’s resilience despite other market turmoil makes some investors consider it as at risk of another record high for Bitcoin.
Bitcoin Rally Cites Broader crypto-market surge. Market-wide cryptocurrencies total market capitalization rose more than $15 billion to $3.23 trillion as Bitcoin and Ethereum all recovered. This is after the market value of digital assets had recently reached a record of $3.235 trillion, flashing new confidence among investors in the space.
One of the key reasons of Bitcoin’s recent surge is the yield movement in U.S. Treasury yields. The 10-year U.S. Treasury yield fell 1.25% on Tuesday, hitting its lowest in a week at 4.363%. Lower yields on traditional bonds make non-yielding assets like Bitcoin appear more attractive to investors who seek higher returns. In such an environment where traditional safe-haven investments return less, Bitcoin and other cryptocurrencies have significantly become the target investment for those interested in potential growth.
Hopes for future interest rate cuts by the United States are also adding a new sentiment to crypto bulls. With the Fedwatch tool indicating a 68% probability of the Federal Reserve’s 0.25 percentage point interest rate cut in December, lower interest rates would mean cheaper borrowing and may lift demand on riskier assets, including Bitcoin. Usually, when the Fed sends out dovish signals on its monetary policy, risky assets, such as cryptocurrencies, tend to be favored.
The broader economic backdrop, with its possibilities for lower interest rates, coupled with political uncertainty surrounding U.S. fiscal policies, has provided a sweet spot for Bitcoin’s rise to prominence. In particular, the incoming Treasury Secretary under President-elect Donald Trump will likely play a key role in shaping future economic policy on fiscal stimulus and tariffs, which could weigh upon market sentiment.
As Bitcoin edges toward its record highs, all eyes remain on the developments of U.S. interest rates and economic policy because at some point, these will force it even higher in the months ahead.
