The crypto market reacted immediately, with the S&P 500 index reaching record highs. The expectation that the Fed’s interest rate cuts will decrease and the strong US economy increased investor confidence.
S&P 500’s Historic Gains Boost Crypto Market
Bitcoin 
$62,753 and the overall crypto market has experienced a rise in line with impressive gains in traditional assets. The S&P 500 gained more than 22%, its best intra-year performance in 24 years. “This is the most resilient market in history,” The Kobeissi Letter said, noting that the S&P 500 is up more than 22% this year.
The S&P 500 has attracted investors’ attention by gaining a market value of $13 trillion over the past year. The index’s current trend points to a 30% gain in 2024, which would be its best annual return since 1997.
Inflation Concerns Increased the Value of Bitcoin
The higher-than-expected September PPI data in the USA (1.8%) somewhat offset the Fed’s latest interest rate cut. This situation increased inflation concerns and increased the value of Bitcoin as a hedge asset.
Inflation concerns have given new impetus to the stock and cryptocurrency markets. Investors are closely monitoring the additional interest rate cut expected to take place in November.
Analysts continue to monitor critical price levels for Bitcoin. While it is stated that the $ 63,900 level is important for the exit, a drop below $ 60,200 may be a retreat signal.
Two-way causality between the S&P 500 and crypto markets shows that the S&P 500 has a greater impact on crypto returns. This constitutes evidence against viewing cryptocurrencies as a risk-reducing tool in portfolios.
Latest Situation and Market Expectations
While the S&P 500 remains at record levels, contributing to Bitcoin’s recovery, market watchers remain wary of the volatility that future Fed decisions could bring.
This dynamic relationship in the markets may cause investors to reconsider their strategies. While strong economic indicators create positive effects on the crypto market, future economic uncertainties may affect activity.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
