Some analysts now forecast short-term volatility but long-term potential for BTC’s price. Donald Trump also made headlines by buying hamburgers with Bitcoin, and Louisiana accepted its first crypto payment for state services. Meanwhile, Howard Winklevoss donated $4 million in Bitcoin to Grove City College to fund new business programs.
Bitcoin Climbs Following Fed’s Rate Cut
Bitcoin’s price jumped by more than 2% after the U.S. Federal Reserve’s decision to cut interest rates by 50 basis points. The Federal Open Market Committee (FOMC) reduced the benchmark federal funds rate to a range of 4.75% to 5.00%, which aligned with economists’ predictions.
The central bank noted that economic activity has continued to expand at a solid pace, with job gains slowing and unemployment slightly rising, but still at low levels. Inflation, while making progress towards the 2% target, is still somewhat elevated. The Fed is confident in its approach to managing inflation but left the door open for future rate adjustments. Further rate cuts will be contingent on incoming data and the evolving economic outlook.
Analysts at QCP Capital predict increased short-term volatility as traders adjust their positions, but they advised people to focus more on long-term opportunities, especially long-dated investment strategies with unlimited upside potential. Despite expected volatility and potential drawdowns, they are still very optimistic about Bitcoin’s price trajectory, and believe BTC could see parabolic price jumps.
In the stock market, major indices initially reacted positively to the Fed’s rate cut. The S&P 500 rose by 0.6%, the Nasdaq Composite gained 0.78%, and the Dow increased by 0.5%. Meanwhile, the CBOE Volatility Index (VIX) climbed 4.4%, which signals heightened market volatility.
Gold also saw a 0.6% increase, trading at $2,586.08 per ounce. At press time, Bitcoin was priced at around $62,148.20, according to data from CoinMarketCap.
Bitcoin 1d price chart (Source: CoinMarketCap)
Donald Trump Buys Burgers with Bitcoin
Bitcoin was also in the spotlight after Republican Party presidential nominee Donald Trump made headlines by becoming the first former U.S. president to use Bitcoin in a transaction during a campaign stop at a bar and restaurant in New York City. According to a post by Pubkey on Sept. 18, Trump used Bitcoin to buy hamburgers at the bar.
The event was attended by Bitcoin advocate and Professional Capital Management CEO Anthony Pompliano and was also reported on Trump’s Truth Social account. The Bitcoin purchase happened just two days after Trump announced the launch of a token through the World Liberty Financial crypto platform, which is managed by his family.
Despite previously criticizing Bitcoin as a “scam” and dismissing crypto as “based on thin air,” Trump has since decided to embrace Bitcoin miners as part of his 2024 presidential campaign and even spoke at the Bitcoin 2024 conference in Nashville.
Pubkey’s marketing staff declined to confirm whether Trump’s Bitcoin transaction was completed on the Lightning Network, but a video captured him buying and handing out several hamburgers, which he called “crypto burgers.” It is believed that Trump holds at least $1 million in cryptocurrency.
Trump handing out burgers
His public use of Bitcoin is a big shift in his stance toward the technology, which contrasts with fellow politicians like Vice President Kamala Harris, who has not made crypto much of a focal point of her campaign.
However, an August ActiVote poll showed that Harris leads Trump by 16 points in New York. Despite this, Trump is still optimistic about his chances in the state. While Harris has not directly opposed cryptocurrency, she has also not deviated much from the Biden administration’s policies. Although, her campaign has received crypto contributions through Future Forward, which is a political action committee supporting her candidacy.
Louisiana Accepts First Crypto Payment
The state of Louisiana also caught the attention of the crypto community after it accepted its first-ever crypto payment following an announcement by State Treasurer John Fleming, allowing residents to use Bitcoin, the Bitcoin Lightning Network, and USD Coin (USDC) to pay for state services. The state’s first crypto transaction was completed for a fine paid to the Louisiana Department of Wildlife and Fisheries using Bitcoin’s Lightning Network.
According to Fleming, this move is part of the state’s plans to embrace new technologies and provide residents with more flexibility in making payments, while also reducing fraudulent transactions. The service converts crypto payments into US dollars to make sure that the state does not face the volatility risks that are usually associated with cryptocurrencies.
Republican State Representative Mark Wright, who led the initiative to expand Louisiana’s payment options, is very excited about the state’s adoption of crypto. In 2022, Wright also helped establish a digital assets working group that determined crypto will be a viable payment option. Additionally, he led a 2021 House resolution that praised Bitcoin inventor Satoshi Nakamoto for their contributions to economic security.
Earlier this year, Louisiana passed legislation banning central bank digital currencies (CBDCs) and also set rules for crypto miners and node operators. However, the state did not ban the use of any other digital currencies.
Howard Winklevoss Donates $4M in Bitcoin
Trump and Flemming are not the only people who are making a point of embracing Bitcoin. Howard Winklevoss, the father of the famous Winklevoss twins, donated $4 million in Bitcoin to Grove City College. This was the first Bitcoin gift the college has ever received.
The donation will fund new business programs at the college, where Winklevoss first developed an interest in sound money and the Austrian school of economics, which later influenced Bitcoin’s creator, Satoshi Nakamoto.
Winklevoss recalled his ”eureka” moment with Bitcoin when he realized it was non-government, digital money with a fixed supply, and even compared it to ”sound money that works like email.” His understanding of sound money principles came from his studies at Grove City College under economist Hans Sennholz, who was part of the Austrian School of economics. Winklevoss bought his first Bitcoin in 2013 and later invested in Ethereum (ETH) and other crypto projects.
Tyler Winklevoss said that while he and his brother Cameron introduced their father to Bitcoin, it was likely their father’s early teachings on sound money that laid the foundation for their interest in the cryptocurrency.
Winklevoss senior has had a very successful career in academia and business. He has also founded several ventures, including Winklevoss Technologies, which was acquired for $125 million in 2023. The Winklevoss School of Business will be officially named in honor of the donation at a ceremony in November.
This article was originally Posted on Coinpaper.com
