The world of digital money, known as cryptocurrency, is showing a lot of activity right now. This excitement comes as the Federal Reserve (often called ‘the Fed’), which is the central bank of the United States, is expected to announce a ‘rate cut’ later today (December 10).
A ‘rate cut’ means the Fed lowers the interest rates that banks charge each other. This generally makes it cheaper to borrow money, which can encourage spending and investing, potentially leading more people to put money into things like cryptocurrencies.
Bitcoin (BTC), the first and most famous cryptocurrency, briefly saw its price jump to about $94,500. However, it later dropped a little. Ethereum (ETH) and many other major digital currencies, known as ‘altcoins’ (all cryptocurrencies other than Bitcoin), saw even bigger price increases over the past 24 hours.
Bitcoin’s Price Jumps
A few hours ago, Bitcoin’s price suddenly went up, briefly going over $94,500. This increase happened because there was a very high chance (96%, according to Polymarket) that the Fed would cut interest rates by a small amount. This small change is 0.25%, also called 25 basis points. One ‘basis point’ is a way to describe a very small percentage change, equal to 0.01%.
Jerome Powell, the Chairman of the Fed, will officially announce the decision later today. This announcement could cause Bitcoin’s price, and the prices of other cryptocurrencies, to change quickly. This rapid change in prices is known as ‘volatility‘.
It’s worth noting that Bitcoin couldn’t keep its high price for long. Some investors, known as ‘bears‘ (who expect prices to fall), caused the price to drop back down a bit, removing some of the earlier gains. As of now, Bitcoin is trading at around $93,000 (according to TradingView’s data), which is still a 3% increase for the day.
After these price movements, the total value of all Bitcoins in existence (called its ‘market capitalization‘ or ‘market cap’) went up to nearly $1.85 trillion. Market capitalization is calculated by multiplying the current price of one coin by the total number of coins available. Also, Bitcoin now makes up about 55.38% of the total value of *all* cryptocurrencies. This is called its ‘dominance’ over altcoins, showing its share of the total crypto market value.
Ethereum and Cardano Also Rise
While Bitcoin showed a clear comeback, it was the major altcoins that saw even bigger gains. Ethereum (ETH) jumped by 9% in the last 24 hours to reach about $3,350. Cardano (ADA) had an even more impressive increase of 12%, hitting $0.47.
Many other altcoins like Avalanche (AVAX), Polkadot (DOT), Worldcoin (WLD), Internet Computer (ICP), Hyperliquid (HYPE), and Dogecoin (DOGE) also saw good increases, going up between 5% and 8% today. Meanwhile, Zcash (ZEC) continued to grow and is now worth more than $430.
Only a few altcoins experienced small drops in price today, including Pi Network (PI), Bittensor (TAO), Tron (TRX), and Bitcoin Cash (BCH). Overall, the total value of *all* cryptocurrencies combined (‘total market capitalization’) is now approximately $3.26 trillion. This is a 3.3% increase compared to yesterday.