The post The Federal Reserve’s rate cut will do more for crypto than Wall Street appeared on BitcoinEthereumNews.com.

The Federal Reserve is on the verge of cutting interest rates, following the European Central Bank (ECB), the Bank of England, and the People’s Bank of China (PBOC). But what if the cut could mean a lot more for crypto than for the suits on Wall Street? Traditional markets and DeFi markets might react in very different ways. We know that there’s a 76% chance that the Fed will cut interest rates by 0.25 percentage points this month. By the end of 2024, we might see three cuts of 25 basis points each. However, JPMorgan is already waving red flags. They say even if the Fed cuts rates, the stock market’s party is over. The S&P 500 has taken beatings in September over the last five years, dropping on average by 4.2%.  Investors are on edge, waiting for the latest economic data, like jobs numbers, to figure out what’s next. The big guys are worried that rate cuts are just a reaction to slowing growth, not a signal for more market gains. Even with the recent rally, the S&P 500 jumping 25% in the past year, this could be just a fluke. It’s the biggest pre-rate cut rally in 70 years. Still, don’t pop the champagne just yet.  Those gains might not stick around. Some companies have enjoyed better earnings because of the higher benchmark rates, making money off bonds. But if rates drop, that income might dry up fast. Crypto’s wild card moment Now, let’s talk crypto. When borrowing gets cheaper, people start looking for higher returns, and that’s where crypto comes in. History shows that crypto tends to do well when the Fed cuts rates.  We saw it during the bull runs of 2013-2014 and 2016-2017. And this time could be no different. The crypto market reacts more…

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Filed under: News - @ September 2, 2024 2:20 pm