- Understanding the impact of the Fed rate cut is crucial for traders and investors.
- The Fed rate cut could lead to a parabolic effect in the crypto market.
- Financial experts weigh in on the expected Fed rate cut and its effect on the crypto market.
Speculations over the upcoming Fed rate cuts and the US Presidential election are already influencing the financial and crypto market space. Could these events make a big impact? If so, how and how much? Let’s take a closer look at what Fed rate cuts mean, how it matters to the crypto market, and what is the expected Fed rate cut.
What Is the Fed Rate Cut?
A Fed cut is the interest rate banks use to charge each other when lending money overnight to meet the Federal Reserve requirement. Thus, a Fed rate cut would mean lowering the Fed funds target rate which is important as it affects the number of other interest rates that use this target rate as a reference point.
Analysts and financial enthusiasts are trying to predict the Fed rate cut in the present market. One analyst says that the market is in deep trouble and a 0.25% rate cut just won’t do. Meanwhile, financial experts and federal entities are debating over 0.5% and 0.75% rate cuts.
How Will the Fed Rate Cut Affect the Crypto Market?
Like all sectors and industries are somehow connected, the financial industries are the same. In terms of how the rate cut will affect the crypto industry, one seasoned crypto investor shares his take.
According to this analyst, a short-term crash will hit the market till October followed by an up season till March 2025. He expects this crash to take BTC price to the $40,000 range leading to severe FUD and sell-offs.
He also says that there is a possibility that the cut doesn’t affect the crypto market at all. The analyst goes on to state that a cycle top could come about by Q4 of 2025. He ends his analysis by encouraging traders not to make decisions based on short-term market movements.
What is the Expected Fed Rate Cut?
Presently financial experts and crypto analysts are all weighing in on what they believe the Fed rate cut would be. As many have already ruled out a possibility for a 0.25% rate cut, the major expectation now lies between 0.5% and 0.75%.
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As we can see from the post above, Senator Elizabeth Warren calls for a 0.75% interest rate cut by the Fed. Meanwhile, Doctor Profit, a reputed crypto analyst is adamant about a 0.5% rate cut. Known for his accurate predictions in the past, crypto traders watch the prediction closely.
Ultimately, the crypto market is bullish over the Fed rate cut, as one popular crypto figure put it, a 0.25% rate cut is bullish, a 0.50% rate cut is very bullish, and a 0.75% rate cut will be parabolic for the crypto market. With such high hopes, the crypto community waits eagerly for the Fed rate cut to be announced soon.
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