Bitcoin Hits New All-Time High of $107,000 Ahead of This Week's Fed Decision

After a week of incredible growth, Bitcoin finally hit new all-time highs of $107,000 on Monday, Dec. 16, marking a 145% surge since the start of the year, according to CoinMarketCap. As the much-anticipated Federal Reserve’s rate cut nears, analysts weigh in on the possible rate cut impact on this leading cryptocurrency.

Source: CoinMarketCap

Luis Buenaventura, head of crypto at GCash, expressed skepticism about the influence of the rate cut. He added that Historical patterns back him up: Bitcoin has often surged 50% in under 60 days and gained another 35% in the two months after a cut.

“I don’t believe a Fed rate cut will have any substantial impact on the price trend, as the market has been expecting it for at least a few weeks now,” said Buenaventura.

Fed Eyes Rate Cut: 93% Chance Confirmed

The Federal Open Market Committee is set to announce its rate decision on December 18 at 14:00 ET, with Fed Chair Jerome Powell addressing the press shortly after. Expectations are firmly set on a 25 basis-point cut, bringing rates down to a range between 4.25% and 4.50%. According to the CME FedWatch Tool, there’s a 93.4% chance of this happening.

Earlier inflation data also nudged the market toward this expectation. The latest Consumer Price Index figures aligned with forecasts, reinforcing the idea that borrowing costs need to come down. “The market likes seeing inflation come in within expectations,” noted Henry Elder, a principal at UTXO Management. Traders are now debating whether $100,000 is the new floor for Bitcoin or a ceiling waiting to be broken.

The last Fed “dot plot” in September pointed to 2.5 points of rate cuts by 2026, which would pull interest rates below 3%. However, some analysts expect these projections to shift downward after Wednesday’s announcement. If borrowing costs decrease as anticipated, it could further fuel the bullish crypto sentiment.

Bitcoin Climbs 50% as Crypto-Friendly Policies Gain Traction

The recent U.S. presidential election also played a role in Bitcoin’s momentum. After the outcome, Bitcoin climbed 50% in just a few weeks. Eric Trump’s comments added fuel to the fire, saying his father would "be an unbelievable ally to the industry.” This nod toward potential crypto-friendly policies has left some investors eager for what comes next.

Avinash Shekhar, Co-Founder & CEO of Pi42, pointed to the broader context of the rally. "Bitcoin has demonstrated bullish momentum" due to macroeconomic data and hints at rate reductions. Ether (ETH) has also benefited, hovering around the $4,000 mark, just 17% shy of its record high from November 2021.

Despite all eyes on the Fed, many traders are more focused on Bitcoin’s technical indicators and institutional engagement. The market’s structure appears increasingly robust, with ETFs drawing substantial inflows and adoption metrics signaling strength. This could mean Bitcoin’s future isn’t tied solely to rate cuts.

Broader market conditions seem to reflect this sentiment. The crypto market’s positive momentum isn’t confined to Bitcoin alone. With Ether making strong moves and other cryptocurrencies riding the wave, the outlook remains optimistic—even as traditional finance shifts.