Fed Rate Cut Anticipation Fuels Crypto Market Speculation
Federal Reserve Chair Jerome Powell's recent comments on ending quantitative tightening have ignited fresh speculation in cryptocurrency markets. The potential shift toward quantitative easing and higher probability of rate cuts before October is reshaping liquidity expectations.
Market analysts now see a 95% chance of at least a 25 basis point cut by October, with three reductions anticipated through 2025. This monetary policy pivot could create favorable conditions for digital assets as capital seeks higher-yielding alternatives.
The crypto market's sensitivity to liquidity flows places it in a unique position to benefit from the Fed's changing stance. Powell cited declining bank reserves and reduced usage of the Fed's reverse repo facility as key factors driving this policy evolution.
