Why Crypto Bulls Are Watching the Fed’s 50 bps Rate Cut This Quarter

• This 50 basis points rate cut by the Fed is more in contrast to the BOJ’s unchanged rates and may affect global investment decisions.
• Lower interest rates in the U. S. may force users to look for other profitable investments, such as cryptocurrencies.
• The crypto market revenues are expected to increase in Q4 owing to enhanced capital flow and investor confidence.

This week, the global financial market saw some actions from two of the largest central banks in the world. The BOJ decided to leave its interest rates unchanged, while the Fed made a sizable 50-bp cut. Such policies from the BOJ and the Fed have led to expectations that the cryptocurrency market might be in a favorable position as the fourth quarter nears.

Bank of Japan keeps rates at the same level, while the FED has cut the rates by 50 bps earlier this week.

Good things are likely to happen on the #Crypto markets after this week.

Bullish Q4.

— Michaël van de Poppe (@CryptoMichNL) September 20, 2024

Central bank rates are major market movers because of their direct impact on investor psychology and financial system liquidity around the world. Currently, the BOJ has decided to keep interest rates unchanged to mirror Japan’s approach to economic recovery and not add any further risk to its economy. However, a 50 basis point cut in interest rates to support economic expansion portrays the Fed as more proactive in taming inflation and reviving economic activity.

The Influence on Cryptocurrency Markets

These differences in the policies conducted by the central banks can have significant variations for the market of cryptocurrencies. Reduced interest rates in the U. S. may make investors look for higher yields in other investments such as cryptocurrencies. Such steps have always led capital to the crypto market as lower returns on other investment instruments make higher-risk investments more attractive. 

In light of the recent actions by the Fed which means that rates could possibly be cut to provide more liquidity in the market the cryptocurrency like bitcoins and Ethereum could be boosted.Specialists expect the crypto market revenues to start rising in the fourth quarter due to capital inflows and gaining investors’ trust. 

This stability, as well as the current BOJ’s policy, might lower the risk and more people will be interested in the high-growth areas like cryptocurrencies. The global economy is still rather unpredictable, and rate decisions made by the BOJ and Fed will determine crypto markets.

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