Bitcoin edged higher on Monday, extending its rebound as traders priced in a widely expected U.S. Federal Reserve rate cut later this week. The world’s largest cryptocurrency rose 0.7% to $116,527 by 06:01 GMT, adding to last week’s 5% gain.
The move comes after Bitcoin clawed back from heavy selling in mid-August through early September. Lower interest rates typically benefit speculative assets like cryptocurrencies by easing liquidity conditions and reducing borrowing costs.
Futures markets reflected near certainty of action from the Fed: CME FedWatch data showed a 99.6% probability of a 25-basis-point cut, with only a 0.4% chance policymakers hold rates steady.
Still, Federal Reserve Chair Jerome Powell has remained cautious, citing persistent inflation risks and avoiding firm commitments on the pace of easing. Traders now await Wednesday’s meeting for clarity on whether this cut marks the start of a deeper policy shift.
Corporate Treasury Concerns Resurface
Despite Bitcoin’s recovery, concerns about corporate treasuries’ exposure to crypto weighed on sentiment. Corporate holdings were a significant driver of demand earlier this year, but skepticism is growing over the sustainability of the strategy.
Strategy Inc. (formerly MicroStrategy), the largest public holder of Bitcoin, was recently excluded from S&P 500 index eligibility. Analysts at JPMorgan warned that limited index inclusions could dampen enthusiasm for similar treasury allocations, raising questions over long-term demand support.
Key market drivers include:
- Corporate exposure: Questions over treasury strategies remain unresolved.
- Index inclusion limits: Strategy Inc.’s exclusion highlights structural challenges.
- Market rotation: Equities continue to outpace crypto in risk-driven rallies.
These factors contributed to Bitcoin lagging behind broader risk assets, even as Wall Street benchmarks notched record highs last week.
Altcoins Struggle After Brief Rally
While Bitcoin held modest gains, the wider crypto market slipped back into negative territory. Many altcoins were still consolidating losses from late summer despite last week’s bounce.
- Ether (ETH): Flat at $4,669.36.
- XRP: Down 1.1% to $3.0581.
- Solana (SOL): Fell 1.4%.
- Cardano (ADA): Dropped 2.5%.
- Dogecoin (DOGE): Declined 3.7%.
- $TRUMP token: Eased 1.3%.
The divergence between Bitcoin and its peers underscores lingering caution across crypto markets. With monetary policy at a turning point, traders remain focused on whether the Fed delivers a clear easing path or maintains a cautious stance that could limit speculative momentum.