Bitcoin rose on Thursday, continuing its gains after the Federal Reserve cut interest rates by 25 basis points, in the first cut in nine months.

The world’s largest digital currency climbed above 117,000 dollars (85,840 pounds sterling), its highest level since August 17, ending a sideways trend that lasted a week, and pushing the wider digital asset market higher after the Federal Reserve’s monetary policy turned to a more accommodative tone.

Investors scrutinized the remarks of Fed Chair Jerome Powell, which hinted at the possibility of accelerating the pace of monetary easing during next year.

The Federal Open Market Committee (FOMC) voted 11 to 1 in favor of cutting rates by 25 basis points, while Trump’s ally Stephen Miran dissented, calling for a larger cut of half a percentage point. The latest Federal Reserve projections indicate two additional cuts during the current year, which could bring the target federal funds rate to a range of 3.50%–3.75% by December.

October has historically been a strong month for Bitcoin

Crypto investors pointed to the seasonal pattern that often supports Bitcoin during this period of the year.

Investor and entrepreneur Lark Davis wrote on platform X: “Since 2020, every September Fed meeting (except the 2022 collapse) has paved the way for massive Bitcoin rallies. It is less related to the decision itself and more related to seasonality. Uptober is real.”

Ethereum (ETH-USD) rose by 1% during the past 24 hours, but it is still confined within a trading range below the level of 4,900 dollars for the fourth week. Other major currencies also advanced, as Dogecoin (DOGE-USD) and Binance’s BNB coin (BNB-EUR) rose by more than 4%, while XRP (XRP-USD) climbed by about 3% after a bullish technical breakout. Solana (SOL) also rose by about 4%, temporarily surpassing the level of 245 dollars, supported by growing optimism about CME Group’s plan to launch SOL and XRP options on October 13, in a step that is seen as opening the door to greater institutional participation.

Reservations about the impact of the Federal Reserve’s decision

Nevertheless, not all observers were convinced that the latest rate cut necessarily benefits the cryptocurrency market.

Jai Kedia, a researcher at the Cato Institute, said: “The weakness of the labor market is what convinced the Federal Open Market Committee to cut rates, but this decision is not necessarily positive, especially as inflation remains well above the Fed’s 2% target. Monetary rules would have called for keeping rates steady or even a slight increase.”

Fabian Dori, head of investments at Sygnum Bank, warned of the complexity of the scene: “The underlying dynamics remain complex. The US labor market is weakening, but inflation is still sticky, while recent PMI data indicate a new acceleration in business activity. At the same time, producer price inflation is falling again, which creates contradictory signals.”

Oil prices fell on Thursday as traders weighed the Federal Reserve’s interest rate cut against lingering concerns over a slowdown in the US economy.

Brent crude futures dropped 30 cents, or 0.4%, to $67.65 a barrel by 09:37 GMT. US West Texas Intermediate (WTI) crude slipped 30 cents, or 0.5%, to $63.75 a barrel.

The Fed cut its benchmark rate by 25 basis points on Wednesday and signaled it would continue lowering borrowing costs gradually through the rest of the year in response to signs of labor market weakness. Lower borrowing costs typically support oil demand and prices.

Kuwaiti oil minister Tareq Al-Roumi said he expects demand for crude to rise following the Fed’s move, especially from Asian markets.

But other analysts were skeptical about any lasting boost. Jorge Montepeque, managing director at Onyx Capital Group, said: “They made this decision now because the economy is clearly slowing. The Fed is trying to restore growth.”

Fed Chair Jerome Powell noted that labor market risks are rising relative to inflation risks, though inflationary pressures still need to be monitored and managed.

The market was also pressured by persistent oversupply and weak fuel demand in the US, the world’s biggest oil consumer.

Data from the Energy Information Administration showed US crude inventories fell sharply last week as net imports dropped to a record low and exports surged to their highest in nearly two years. However, distillate stockpiles rose by 4 million barrels, far above expectations for a 1 million barrel increase, stoking concerns over demand in the US market and weighing on prices.

The US dollar saw choppy trading on Thursday as investors continued to digest the Fed’s cautious stance on further rate cuts, while attention shifted to the Bank of England’s upcoming decision, where no change in policy is expected.

Sterling slipped 0.1% to $1.3615, after climbing in the previous session to $1.3726, its strongest since July 2. The euro steadied at $1.1823, having retreated from a high of $1.19185 hit right after the Fed’s announcement, the strongest since June 2021.

The Fed cut interest rates by 25 basis points on Wednesday as widely anticipated, with Chair Jerome Powell describing the move as a “risk management cut” in response to labor market weakness, while stressing there was no need to rush into deeper easing.

Analysts were split on the Fed’s message: Goldman Sachs suggested Wednesday’s cut could mark the start of a series of reductions, while ANZ strategists argued Powell’s tone was “not dovish at all.”

Immediately after the decision, the dollar index dropped to 96.224, its weakest since February 2022, before rebounding sharply to end the day up 0.44% at 97.06.

Elliot Clarke, head of international economics at Westpac, said the Fed’s revised projections “highlighted the uncertainty that still surrounds the outlook,” noting that the expected timing and scale of cuts reflect ongoing inflation risks.

The Bank of England is widely expected to keep rates at 4% at Thursday’s meeting, with markets focused instead on the pace of quantitative easing reduction. Francesco Pesole, FX strategist at ING, warned that “any dovish surprise on QE could spark a sell-off in gilts and weigh heavily on sterling.”

Official data on Wednesday showed UK inflation rose 3.8% year-on-year in August, reinforcing expectations that no immediate rate cut is on the horizon.

Norway cuts rates for the second time in three months

The Norwegian krone showed little reaction after the central bank delivered a widely expected rate cut, its second in three months. Policymakers signaled further reductions are likely next year if the economy evolves as projected.

The euro trimmed earlier gains against the krone, last up just 0.1% at 0.86775.

Yen awaits Bank of Japan decision

The dollar edged up to 147.215 yen ahead of Friday’s BOJ meeting, with markets expecting no change in rates but pricing a quarter-point hike by March, with 50% odds of a move this year.

Investors are also watching the October 4 LDP leadership vote to replace outgoing Prime Minister Shigeru Ishiba, following the party’s heavy defeat in upper house elections.

New Zealand GDP contraction pressures NZD

Data on Thursday showed New Zealand’s economy shrank 0.9% in Q2 from the prior quarter, a worse-than-expected result that added to pressure on the RBNZ.

The weak data fueled bets on more easing, pushing the kiwi down around 1% to $0.5895, its lowest since September 8.

The Bank of England on Thursday published the voting details on UK interest rates at the conclusion of its September 18 meeting, showing seven members voted to keep rates unchanged, while two members voted in favor of a 25-basis-point cut.

The outcome diverged from market expectations, which had pointed to an 8–1 split in favor of holding rates steady.

• This vote is considered negative for the British pound.