The U.S. Federal Reserve is poised to announce a rate cut in early Thursday, amid differing views on inflation and economic stability.
This decision may affect global markets, including cryptocurrencies, which are sensitive to changes in interest rates and liquidity conditions.
Rate Cut Expectations Amid Market Skepticism
The Federal Reserve is expected to make a rate cut, yet skepticism surrounds this measure due to conflicting policymaker views and the quick obsolescence of projections from new data releases. Jerome Powell will likely address these issues, highlighting the game of risks given current economic conditions.
Large institutions, such as JPMorgan and Goldman Sachs, interpret the rate path for its implications. Yet, the market skepticism persists due to potential divergences between guidance and subsequent economic data. Market observers are particularly interested in reactions in crypto markets like BTC and ETH.
Did you know? In previous low-rate eras, such as 2020–2021, significant bull markets in BTC and ETH were observed, highlighting the impact of monetary policy changes on crypto assets.
Crypto Markets Watch Fed’s Decision on BTC and ETH
Bitcoin (BTC) currently stands at $92,072.06, with a market cap of $1.84 trillion. Despite recent volatility, including a 1.37% 24-hour increase, BTC's long-term performance shows a 60-day decline of 18.03%. The circulating supply reaches 19.96 million against a maximum of 21 million BTC.
The Coincu research team notes that potential rate cuts might positively influence crypto pricing, especially in high-beta tokens like ETH. With regulatory and institutional eyes on these movements, the Fed's decision is crucial in shaping the coming months for digital assets.