Cardano Pumps 16%, Bitcoin Could Pop to $100K After Fed Rate Cut

As a seasoned analyst with over two decades of experience in financial markets, I have witnessed numerous market cycles and trends. The recent surge in Cardano (ADA) is reminiscent of the early days of Bitcoin, when altcoins often outperformed BTC during market rallies. It’s always interesting to see which projects gain traction and become the next big thing.

In the last day, Cardano (ADA) has climbed by 16%, standing out among significant cryptocurrencies, as traders anticipate a potential $100,000 price point for Bitcoin (BTC) in the near future, sparked by the Federal Reserve’s recent reduction in interest rates on Thursday.

In the early hours of Friday in Europe, ADA surpassed 42 cents, a level not seen since late July. Factors driving this price increase include a broader market rally and renewed enthusiasm for decentralized finance (DeFi), which also boosted ether (ETH) and Solana (SOL). Additionally, some analysts attribute ADA’s growth to its attractiveness among individual investors.

Following a two-day rally, which established a new record high for BTC at over $76,000, other cryptocurrencies saw mixed responses. Bitcoin itself increased by approximately 1.4%, with XRP and BNB Chain’s BNB experiencing gains of less than 2%. Ethereum (ETH) rose more than 4%, and Solana (SOL) surged by about 7.5%. The CoinDesk 20 Index, which tracks a broad range of cryptocurrencies, climbed 3.5%.

On Thursday, as anticipated, the Federal Reserve lowered interest rates by a quarter of a percentage point. Generally speaking, this move tends to boost assets considered risky, such as Bitcoin, by enhancing liquidity and making the U.S. dollar less robust.

For the first time after Donald Trump’s clear win as president, Jerome Powell, the head of the Federal Reserve, reassured that the upcoming policies wouldn’t be influenced by the election results in the short term. This statement helped to allay concerns about an unexpected shift towards more aggressive monetary policy.

Yesterday, United States-based Bitcoin exchange-traded funds (ETFs) saw a new record in net inflows, exceeding $1.3 billion, surpassing the previous high of $1.1 billion from March. This surge was primarily driven by BlackRock’s IBIT ETF.

Against that backdrop, traders are ebullient about bitcoin’s prospects.

In the near future, 100k is expected to serve as a significant milestone for interest rates due to the number’s symbolic value and the shift in decimal digits, as stated by Min Jung from Presto Research in a memo to CoinDesk. Looking further ahead, we anticipate that the United States might eventually incorporate Bitcoin into its financial reserves, possibly under a less conspicuous title like a ‘strategic Bitcoin deposit’, but potentially using a more subtle moniker.

Jung mentioned this, and it seems we’re aiming for approximately 110,000 units,” he said, implying a connection to Trump’s pledge about accumulating Bitcoin within the country’s reserves.

Alex Kuptsikevich, senior market analyst at FxPro, mirrored the sentiment.

In a message to CoinDesk, Kuptsikevich stated that the initial cryptocurrency significantly increased following the US election results. However, it’s currently holding its peak and may stabilize before another increase occurs. Essentially, he suggests that the recent highs have initiated a strong growth wave capable of reaching $100-110K over the next 2-3 months, without any major corrections along the way.

Some traders warned that Bitcoin might experience a temporary decline, while still maintaining an overall positive outlook towards it.

Investors are reducing their participation in certain ‘Trump trades.’ Following the election, the US dollar has largely recovered its previous gains, and Treasury yields have stabilized within their recent ranges following a short period of volatility, as reported by Singapore-based crypto fund QCP Capital via a Telegram message on Friday.

With global financial markets weighing the possibility of a 60% tariff by Trump on China, along with apprehensions about increasing national debt, there’s a chance that Bitcoin (BTC) may be perceived as having lower risk compared to equities. This could make BTC more attractive and potentially lead it to outperform other assets associated with high financial risk.