Bitcoin rises to new record above $106,000 as investors await this week's Fed decision

Bitcoin rallied to a new all-time high Sunday evening as investors awaited an expected interest rate cut by the Federal Reserve later this week.

The price of the flagship cryptocurrency was last higher by more than 4% at $105,207.00, according to Coin Metrics. Earlier, it hit a new record of $106,509. Ether also rose 4%, climbing to just below the key $4,000 level. The broader crypto market, as measured by the CoinDesk 20 index, gained 4%.

Shares of crypto equities Coinbase and MicroStrategy were little changed in premarket trading, even after following the announcement that MicroStrategy will join the Nasdaq 100 stock index and heavily traded QQQ ETF later this month.

Bitcoin rises to a new level above $106,000

Bitcoin's rally came after the tech-heavy Nasdaq Composite on Friday closed the U.S. trading week with a 0.3% gain, outperforming the other major stock indexes.

Investors are expecting the Fed to lower interest rates this week during its two-day policy meeting, which will conclude Wednesday. The CME Fedwatch tool currently forecasts a 96% chance of a 25-basis-points cut. That would likely be positive for the price of bitcoin, which often trades like a tech stock and therefore benefits from lower interest rates.

Lower interest rates also imply a weakening dollar and growing money supply – both of which have demonstrated long-term correlations with bitcoin.

Bitcoin is now up nearly 8% for the month, 50% since the U.S. presidential election and 145% for the year. The promise of a friendlier regulatory environment and potential establishment of a national strategic bitcoin reserve in the incoming Donald Trump administration continues to be a positive catalyst for the digital asset and cryptocurrencies at large.