- Bitcoin hit a new all-time high above $112K after the Fed minutes dropped.
- The Fed still expects two rate cuts in 2025, with some open to cutting as soon as this month.
- Investors are betting on looser policy ahead of next week’s CPI report.
Bitcoin ascended to a new all-time high today, after surpassing $112,000 (Coinbase data) for the first time ever. As this happened, investors may be wondering why the market-leading cryptocurrency gained this much strength on July 9, and the reason may lie in today’s release of the FOMC minutes.
In the Minutes, Fed participants agreed that inflation is looking to be under control. They still estimate to hit the goal of 2% inflation by 2027, as data from Headline PCE (2.3%) and Core PCE (2.6%) show stronger results than earlier in the year.
Tariff policies are still considered a wild card by Federal Reserve members and are likely the main culprit that led the Fed to halt interest rate cuts in 2025.
“In discussing their outlooks for inflation, participants noted that increased tariffs were likely to put upward pressure on prices. There was considerable uncertainty, however, about the timing, size, and duration of these effects.”
However, as the tariff story evolved, so did the Fed’s tone. The Minutes revealed that most participants are still expecting two 25 basis point rate cuts this year, despite fears of inflation and recession from tariffs. In fact, some members are open to a rate slash as soon as this month:
“A couple of participants noted that, if the data evolve in line with their expectations, they would be open to considering a reduction in the target range for the policy rate as soon as at the next meeting.”
Bitcoin Reaches New Highs
Investor sentiment reacted extremely well to the report. With an interest rate cut at the end of the tunnel, investors are pricing in that lower borrowing costs will boost liquidity and risk appetite, ultimately driving more demand for Bitcoin and other digital assets.
Bitcoin is currently trading at $111,077, up by over 2% in the last 24 hours. The asset hit as high as $112,142 after the Fed minutes dropped, marking a new all-time high price for Bitcoin.
With the Fed signaling flexibility and inflation appearing to be under control, the macro environment may finally be shifting towards Bitcoin’s favor. The real test of whether the Fed will lower rates or not in July will likely come next week with June’s Consumer Price Index Report.
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