Bitcoin Approaches $100K as Fed Maintains Rates; Ethereum and Altcoins Surge
By Navdeep Singh, ETMarkets.com
Last Updated: May 08, 2025
In a striking turn of events in the cryptocurrency market, Bitcoin has surged past the $98,800 mark following the US Federal Reserve’s decision to hold interest rates steady. As of 12:06 PM IST on Thursday, Bitcoin was trading at $98,816, reflecting a 2.3% increase. The news has triggered a wave of optimism among investors, with Ethereum also seeing gains, rising 4.1% to reach $1,903. The total global cryptocurrency market capitalization has jumped 2.52%, nearing the $3.06 trillion mark, according to CoinMarketCap.
Market Overview
The current rally is largely attributed to renewed investor confidence and macroeconomic factors. Bitcoin’s robust performance follows the Federal Reserve’s decision to keep its policy rate unchanged between 4.25% and 4.50%, which they justified amidst rising inflation and unemployment concerns. Fed Chair Jerome Powell acknowledged uncertainty surrounding economic growth, which has tempered expectations for a rate cut in June, now only estimated at 20%. However, the prospect of a July rate cut has increased significantly to 70%.
“Bitcoin has decisively breached the $97,500 resistance level after the US FOMC meeting, signaling renewed bullish momentum,” remarked Vikram Subburaj, CEO of Giottus Crypto Platform. The sentiment in the markets has been bolstered further by commentary from U.S. President Donald Trump, who has indicated plans for a new trade deal, alongside calls for lower interest rates.
Altcoin Surge and Individual Performances
The bullish sentiment is not limited to Bitcoin. Many altcoins have also capitalized on the positive vibes, with notable gains across the board. Sui and Polkadot led the surge, increasing by 7.8% and 7.7%, respectively. Other prominent cryptocurrencies such as Chainlink and Avalanche saw increases of 5%, while Shiba Inu climbed by 4.5%. Additionally, Dogecoin, Cardano, Solana, and Tron recorded gains ranging from 2% to 5%.
This overall market glow can be ascribed to factors including institutional inflows, robust demand for exchange-traded funds (ETFs), and accumulation by major investors, often referred to as "whales". Analysts caution, however, that although the momentum is strong, significant volatility may arise around the psychological $100,000 mark due to potential profit-taking or external economic factors.
Key Economic Drivers
Ryan Lee, Chief Analyst at Bitget Research, emphasized that Bitcoin’s recent ascent is largely macro-driven. "The surge is fueled by expectations of Fed rate cuts and Trump’s vocal push for lower rates,” he explained. He noted that the liquidity flood from central banks, particularly China’s easing measures and the Fed’s latest $34 billion in bond purchases, has invigorated crypto valuations.
Edul Patel, Co-founder and CEO of Mudrex, added, “Bitcoin is holding strong above $98,700, attempting a breakout past the $100,000 level. The Fed’s return to quantitative easing and China’s liquidity moves have created a supportive macro backdrop.” He also mentioned that if Bitcoin surpasses the $99,300 threshold, it could trigger short liquidations, propelling the price even higher.
As it stands, Bitcoin’s market capitalization sits at approximately $1.96 trillion, with a significant trading volume increase of 54.6% to $50.38 billion. Stablecoins comprised the overwhelming majority of trading activity, accounting for 90.8% of all transactions, although Bitcoin’s market dominance experienced a slight decline to 64.1%.
Looking Ahead
With traders and investors keeping a close watch on Bitcoin’s trajectory toward the $100,000 mark, the psychological implications of breaching this milestone could serve as both an opportunity and a potential resistance point for the cryptocurrency. As the market anticipates further developments from the Federal Reserve and ongoing economic indicators, the coming weeks will be crucial in determining the sustainability of the current upward momentum.
As always, investors are urged to remain informed and consider the inherent volatility within the cryptocurrency market before making investment decisions.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times.)
Share this article:
