The Federal Reserve surprised investors earlier this week by enacting an aggressive 50 basis point cut in benchmark interest rates, marking the first such move since March 2020.

What happened: The dip in borrowing costs immediately boosted risky asset classes like cryptocurrencies, with Bitcoin BTC/USD spiking 7.7% since the announcement.

The rate was last slashed in an emergency meeting on March 15, 2020, in reaction to the risk posed by the COVID-19 pandemic to the U.S. economy. The federal funds rate was lowered to the range of 0%-0.25%.

At that time, one Bitcoin was priced at $5,392.31. Accordingly, an investment of $1,000 would have fetched you 0.1854 units of the world's largest cryptocurrency.

Today, the price of one Bitcoin has ballooned to $63,797.59, meaning that 0.1854 BTCs would be worth $11,831.21, marking a whopping 1083% return.

See Also: Bitcoin’s Reserve Asset Appeal Increased Due To State Of US Federal Deficit And Debt, Says BlackRock: A Hedge Against ‘Possible Future Events’ Affecting The Dollar

Why It Matters: Bitcoin, along with the broader cryptocurrency market, was expected to witness substantial upsides following the bold reduction in interest rates, according to British multinational bank Standard Chartered.

Other noted macro analysts like Alex Kruger have also issued bullish forecasts for the leading cryptocurrency, calling the 50-basis point cut a "sweet spot."

Price Action: At the time of writing, Bitcoin was exchanging hands at $63,731.27, up 2.83% in the last 24 hours, according to data from Benzinga Pro.

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