Bitcoin Soars to All-Time High Ahead of Anticipated Interest Rate Cuts

In a significant development, Bitcoin surged to a new record level on Sunday. Investors are focused on the expected interest rate cut from the Federal Reserve this weekend. According to a report by Coin Metrics, the leading cryptocurrency's value rose by over 4% to reach $105,207, even touching a record peak of $106,509.

In addition to Bitcoin, Ether, the second-largest cryptocurrency by market capitalization, experienced a similar rise, increasing by 4% and approaching the $4,000 mark. The broader cryptocurrency market also reflected this positive trend, with the CoinDesk 20 index showing an overall gain of 4%.

Despite this vibrancy in the cryptocurrency market, shares of leading crypto firms Coinbase (NASDAQ:COIN) and MicroStrategy showed little change in pre-market trading. This mild response came even as MicroStrategy is set to be included in the Nasdaq 100 stock index and the heavily traded QQQ ETF later in December.

The rally in Bitcoin prices followed the Nasdaq Composite's positive performance, which closed the trading week on Friday with a 0.3% increase, outperforming other major U.S. stock indices.

Market participants are now awaiting the Federal Reserve's two-day policy meeting, which concludes on Wednesday, with widespread expectations for an interest rate cut. According to the CME Fedwatch tool, the likelihood of the Fed announcing a 25 basis point reduction is 96%. Such a move is expected to positively impact Bitcoin prices, as the cryptocurrency often exhibits trading patterns similar to technology stocks that benefit from lower borrowing costs.

The possibility of an interest rate cut also indicates a potential weakening of the U.S. dollar and an increase in the money supply; both factors have historically been associated with the value of Bitcoin. As investors await the Federal Reserve's decision, this expectation has been reflected in the recent price movements of the cryptocurrency.