Bitcoin (BTCUSD) soared temporarily above $76,000 on Thursday, as investors eagerly anticipate the U.S. Federal Reserve's rate cut decision. Having hit a new record high of $76,481 on Wednesday, the largest cryptocurrency by market cap proved resilient in the face of early trading dips on Thursday, rapidly recovering to approach its all-time high once more.
Rate cuts have historically fostered positive effects on bitcoin prices. Lower rates can depress Treasury and bond yields, thus prompting riskier assets, like bitcoin, to become increasingly appealing to investors.
The recent price surge reflects optimisms surrounding the election results, with Donald Trump's victory in the presidential race suggesting a potential for more crypto-friendly policies due to a greater number of pro-crypto lawmakers in Congress. This optimistic mood was evident in the elevated inflows into spot bitcoin exchange-traded funds (ETFs).
Following the clarification of election results, bitcoin ETFs recorded $621.9 million in net inflows on Wednesday, according to Farside Investors' data. Almost half of these inflows found their way into the Fidelity Wise Origin Bitcoin Fund (FBTC), whereas BlackRock's iShares Bitcoin Trust (IBIT) experienced its first ever two-day outflows streak.
Spot ether (ETHUSD) ETFs also recorded their fifth largest day of inflows on Wednesday. However, this influx, at $52.3 million, was still comparably modest when juxtaposed against the inflows into bitcoin ETFs.