Fed cuts interest rates for the first time since 2020. 

In 2024, Fed rates reached their highest levels since 2008, which usually results in lower corporate earnings and slowed growth in the stock market.

Generally, rates go up to combat price inflation and come back down to encourage demand in the markets and give a boost to hiring.

So understandably, everyone was pretty excited to hear a 0.5% rate cut announced in Wednesday's FOMC meeting.

There’s a common belief that when interest rates drop, markets surge. And while the latest rate cut definitely has some Bitcoin bulls foaming at the mouth, it’s no guarantee that crypto or stocks will take off right away.

Despite this year's high rates, Bitcoin has already rose from $42,000 to over $60,000. With the S&P 500 also posting impressive YTD gains of over 19%.

So how much more room is there really to grow?

The correlation between Fed rates and Bitcoin isn't entirely clear, but it is worth noting that Bitcoin’s breakout in 2020 didn’t occur until after rates took a sharp turn south.

What we do know is that Bitcoin tends to benefit most during times of economic uncertainty. But with Bitcoin already starting strong at over $60,000, 2020 level multiples begin to feel a bit out of reach, but then again, who could have ever guessed we would see $70,000 Bitcoin in 2021 either?

 - Joey Segura