Bitcoin and S&P 500 Surge as Fed Rate Cut Boosts Markets

The cryptocurrency market, led by Bitcoin, has seen a notable uptrend since Wednesday after the Federal Reserve (Fed) announced a 50 basis point interest rate cut. Bitcoin surged nearly 3% within the past 24 hours, briefly exceeding $63,000 for the first time in three weeks. This marks a significant recovery, as the digital asset has climbed over 17% from its recent low of $53,300 on September 6, adding more than $200 billion to its market cap.

This upward trend is not limited to cryptocurrencies. U.S. stocks, particularly the S&P 500, have also rallied, gaining nearly $1 trillion in market capitalization since the Fed’s announcement. Like Bitcoin, the S&P 500 has rebounded strongly, adding over $3 trillion in market value after hitting a low earlier this month.

Interestingly, Bitcoin and the S&P 500 have mirrored each other not just in bullish times but also in recent bearish phases. Both assets saw sharp declines following the unwinding of the “yen carry trade,” with the S&P 500 dropping almost 10%, and Bitcoin dipping below $50,000 during the same period. This highlights the growing correlation between Bitcoin and the stock market, particularly as institutional investors have increasingly entered the crypto space through Bitcoin and Ethereum ETFs.

The Fed’s rate cut has encouraged investors to shift funds into riskier assets, contributing to simultaneous rallies in both Bitcoin and stocks. However, this correlation may not be permanent, as the crypto market still faces regulatory uncertainties and remains subject to speculative behavior.

Notably, a chart by @MustStopMurad on X reveals that only 42 of the top 300 cryptocurrencies have outperformed Bitcoin since the start of the year. These outperformers include newly launched tokens and a handful of meme coins, underscoring Bitcoin’s dominance over the majority of established altcoins.