On Friday, the value of the world’s largest cryptocurrency by market capitalization jumped to its highest point since early September, reaching almost $60,000 in anticipation of the Federal Reserve’s upcoming interest rate cuts.

The increase in bitcoin’s price represented a spike of 2.5% on Friday, and showed the crypto changing course for September after a slow start to the month.

Despite cooling inflation, there is growing interest in slashing interest rates to alleviate pressure on the economy.

Riskier assets like crypto are likely to have increased appeal if the Federal Reserve pursues a 50 basis point rate cut – considered a major move by the central bank.

“While a 50 basis point cut by the Fed might signal deeper concerns to the markets, the Fed’s primary focus will be mitigating economic risks rather than managing market reactions,” said Markus Thielen, 10x Research founder.

“The probability of a 50 basis point cut is only 29%, contrasting our view and the prevailing consensus. The chorus is growing louder that the Fed is behind the curve, having missed signs of labor market weakness after being caught off guard in July, Thielen added.

The world’s largest asset manager, BlackRock, also recently weighed in on interest rate cuts, forecasting that the Federal Reserve might be slow to cut rates, with "volatility flare-ups ahead."

"We see multiple factors driving market volatility: resurgent recession fears due to some softer economic data, pre-U.S. election jitters and profit-taking as investors make room for new stock issues," Jean Boivin and other strategists at BlackRock Investment Institute said in a recent note. "We don’t see the Federal Reserve cutting policy rates as sharply as markets expect."

BlackRock strategists posit that high inflation will restrict "how far" the government slashes these interest rates. "Growth jitters and cooling inflation have driven 10-year yields to 15-month lows as investors have priced in more than 100 basis points of cuts by year-end and about 240 basis points of cuts over the next 12 months—implying a Fed response to a recession," Boivin said.

Many volatile assets like crypto increase in attractiveness during these periods, particularly if investors view bitcoin as a diversification tool in a portfolio