U.S.-listed crypto shares surged on Thursday following a half-percentage point interest rate cut that boosted risk appetite, contributing to the momentum of an industry that has already achieved significant wins this year.
This move could reignite interest in Bitcoin, the leading cryptocurrency, which typically influences the entire sector as investors pursue higher returns and move away from safe-haven assets.
Bitcoin gained 4.6% and was last traded at $62,991 on Thursday.
“There’s over $6 trillion in money market funds, soon yielding 50 bps less,” said Matt Mena, crypto research strategist at 21Shares.
“This move could signal a return of liquidity, sparking a risk-on sentiment and fueling a sharp rally.”
MicroStrategy (MSTR.O), one of Bitcoin’s largest corporate supporters, saw a nearly 10% increase. Crypto exchange Coinbase Global (COIN.O) jumped 6.4%.
Digital asset miners like Riot Platforms (RIOT.O), Marathon Digital (MARA.O), and CleanSpark (CLSK.O) rose by 1.6%, 4%, and 5.3%, respectively.
“The cut is aggressive, but more important than its impact is what it signals. This could mean the end of hawkish monetary policy for some time,” stated Henry Robinson, co-founder of crypto mining firm Decimal Digital Currency.
Exchange-traded funds (ETFs) tracking Bitcoin and Ethereum received landmark regulatory approvals earlier this year, bolstering investor sentiment. However, that optimism has become shaky in recent weeks amid shifting dynamics in the upcoming U.S. presidential election.
Republican candidate Donald Trump has branded himself a pro-Bitcoin candidate and pledged to fire SEC Chair Gary Gensler—accused of heavy-handed enforcement—”on day one.” He initiated a new crypto venture earlier this week and reportedly used Bitcoin to pay for burgers for his supporters at a New York bar on Wednesday.
Despite the election uncertainties, industry executives believe the U.S. will remain friendly towards crypto, regardless of the election outcome.