Jerome Powell’s Fed Rate Cut Just Ignited the Next Crypto Bull Run Phase - Here’s Why

Powell's pivot sparks crypto surge as traditional finance scrambles.

Market Momentum Shifts

The Federal Reserve's unexpected rate cut sends institutional capital flooding into digital assets. Bitcoin breaks $100K within hours of the announcement while altcoins post double-digit gains across the board.

Liquidity Floodgates Open

Cheaper borrowing costs push investors toward higher-yielding opportunities—and crypto's volatility suddenly looks more like opportunity than risk. Traditional savings accounts now yield less than most stablecoin protocols, making DeFi the obvious choice for yield hunters.

Institutional FOMO Returns

Hedge funds and family offices that sat out the last rally can't ignore the macro shift. They're piling into crypto ETFs and direct holdings, driving volumes to record levels. Wall Street's latest 'risk-off' environment somehow includes 30% daily moves in meme coins—because nothing says safety like betting on dog-themed tokens.

The Fed just handed crypto its best marketing material yet: proof that traditional finance remains reactive while digital assets lead the charge. Maybe next they'll cut rates to zero so banks can finally compete with 5% APY on savings accounts—oh wait.

Jerome Powell just delivered his most anticipated speech at this month’s Federal Reserve FOMC meeting. Investors have been waiting for Powell to reveal if the Fed rate cut WOULD happen?

The wait is finally over, and Powell has announced a 25 basis point rate cut. This marked the FED’s first rate cut in 2025 and one that could send ripples across the markets.

The reason for the anticipation was that risk-on assets such as Bitcoin and stocks have been rallying for the last few months. This rally presented a double-top scenario similar to what occurred in 2020.

The market has also been on the fence regarding the extension of a rally. The most common expectation was that a rate cut could unlock a new wave of liquidity inflows into the market.

On the other hand, failure to cut would have paved the way for weaker investor sentiment.

What’s Next for Crypto Market Now that Powell has Confirmed a Fed rate cut?

This is the big question, especially when it comes to bitcoin and altcoins. Will the rate cuts be the catalysts that the market needs to kick off its next bullish wave?

Contrary to expectations, both the crypto market and the stock market responded with more downside within the first hour after the rate cut was confirmed.

The S&P500 tanked by 0.45% while the total crypto market cap dipped by 0.40% during the same period.

The NASDAQ slid closer to 1% from its opening price. This was not quite what the market expected, and it was evident by the heavy surge in liquidations.

The pullback yielded a significant surge in liquidations, with longs receiving the sharp end of the stick.

Over $177 million worth of long positions were liquidated in the last 24 hours. Shorts were also not spared, considering the spike in volatility, which yielded about $83 million worth of liquidations for downside bets.

In other words, the fed rate cut announcement could be shaping up as another “buy the rumour, sell the news” event.

The market anticipated a rate cut announcement before Powell’s speech, which consequently led to a bullish bias. This may have created a liquidity sweep scenario for smart money.

Stablecoins May Offer Insights Into Where the Market is Headed after Powell’s Speech

Risk-on assets had already shown signs of recovery at the start of the second hour after the announcement.

This underscored short-term volatility, which could potentially continue to sway the market on either side.

However, the stablecoin market may offer more clarity over where the market is headed. For example, stablecoin FLOW data revealed that Binance just experienced its largest stablecoin inflows since the start of the year.

The stablecoin inflows occurred before Powell’s speech and could signal that smart money was preparing to buy back into the market. The nominal figure was about $2 billion.

The large stablecoin inflows might be the spark that lights the next bullish wave for crypto. The rate cut announcement was expected to influence market sentiment in the coming weeks and months.

While the rate cuts may set the stage for changes in the liquidity landscape, it was worth noting what this meant, especially for cryptocurrencies.

Bitcoin dominance continued declining after the announcement, giving leeway to stablecoins. This suggests that the Fed rate cut may have just set the pace for altcoin season to kick into high gear.