Fed’s First 2025 Rate Cut: What Crypto Investors Should Expect Next
Markets pivot as Fed finally blinks—first cut signals new monetary era
Liquidity Floodgates
Traditional finance braces for impact while digital assets position for tailwinds. Lower rates historically fuel risk-on sentiment—and crypto's primed to capture the overflow.
Bitcoin's Monetary Policy Play
Hard-capped supply meets expanding liquidity. The math favors scarcity over printing—as institutional adoption accelerates amid shifting macro conditions.
Altcoin Acceleration Cycle
Reduced borrowing costs typically ignite innovation cycles. DeFi, AI tokens, and infrastructure projects stand to benefit from cheaper capital and renewed investor appetite.
Regulatory Dance Continues
Watch for policymakers trying to claim credit for markets they still don't understand—classic Fed move after years of fighting inflation they helped create.
Digital gold versus fidget spinner monetary policy—place your bets.
A Growing Divide at The Fed
The decision was nearly unanimous, with only the new Fed governor, and Donald Trump’s pick for Powell’s successor, Stephen Miran, wanting a larger 0.5% cut.
“There is clearly a growing divide at the Fed over policy outlook,” reported the Kobeissi letter, which added that nine officials see two more cuts in 2025 while six officials see none.
SUMMARY OF FED DECISION (9/17/2025):
1. Fed cuts rates by 25 bps in first rate cut of 2025
2. Median projection shows 50 bps in additional rate cuts for 2025
3. Governor Miran dissents in favor of 50 bps cut today
4. Fed says downside risks to employment have risen
5. 6 Fed…
— The Kobeissi Letter (@KobeissiLetter) September 17, 2025
GDP growth slowed to around 1.5% in the first half of 2025, down from 2.5% last year, which “largely reflects a slowdown in consumer spending,” said Powell. The housing sector also remains weak, but this could be due to high interest rates impacting borrowing.
“The decision to cut was all about guarding against downside risks to the job market, so the October decision will once again come down to which way the incoming labor market data break,” said Michael Pearce, deputy chief US economist at Oxford Economics.
CME futures markets currently predict an 87.7% probability of a further 0.25% rate cut at the Fed’s next meeting on October 29.
“We remain committed to supporting maximum employment, bringing inflation sustainably to our 2% goal, and keeping longer-term inflation expectations well anchored,” Powell concluded.
US inflation is above the Fed target at 2.9%, and has been rising for the past four consecutive months. It has not been at or below 2% since February 2021.
Crypto Market Reaction
There was little reaction on crypto markets as the rate cut had been priced in.
Bitcoin jumped toward $118,000 during early trading in Asia on Thursday but had retreated slightly to $117,500 at the time of writing.
Ethereum was performing better with a 3% daily gain to take the asset above $4,600. The altcoins were generally in the green with slightly larger moves for Solana, Dogecoin, Cardano, Hyperliquid, and Avalanche.
