CME's FedWatch data indicates an 86.4% probability of a 25 basis point Federal Reserve rate cut in December. This projection follows a decrease in U.S. jobless claims, significantly impacting cryptocurrency markets globally.
With potential monetary easing on the horizon, market participants anticipate increased liquidity, which is driving volatility in Bitcoin and Ethereum. Upcoming FOMC meetings are expected to further influence the dynamics of the crypto sector.
December Rate Cut: 86.4% Probability and Market Impact
An 86.4% probability of a 25 basis point Fed rate cut in December has been widely reported. CME FedWatch data reflects this sentiment, stemming from a drop in U.S. initial jobless claims, which has sustained these high probabilities. Speculative trading in cryptocurrencies is reacting with anticipation of more favorable investment conditions.
With busy market weeks ahead leading up to the December 10 FOMC meeting, the implications of a rate cut on risk assets like Bitcoin and Ethereum are significant. Increased investor interest is likely, as past trends have shown an appetite for risk during periods of expanded monetary policies.
"The expectation of a Fed rate cut usually affects risk assets, including major cryptocurrencies such as Bitcoin and Ethereum." — Binance CEO, Changpeng Zhao (CZ)
Bitcoin’s Sensitivity and Institutional Investment Trends
Bitcoin (BTC), currently priced at $90,960.15 with a market cap close to $1.82 trillion, is experiencing noticeable activity. With a 24-hour trading volume of $37.47 billion, recent changes show a 4.53% increase over 24 hours. However, BTC faces a longer-term decline trend with a 30-day price dip of 16.73%. This data, sourced from CoinMarketCap, reveals a market adjusting to macroeconomic cues.
Analysts suggest that a continued Fed rate cut trajectory might usher in increased crypto market activity and positioning. Should historical patterns repeat, the ongoing finance landscape may witness intensified regulatory and technological shifts, preparing the ground for potentially revamped market practices.