In a new move, the US Federal Reserve announced today, December 18, a 25 basis point cut in interest rates, to 4.50%. This decision comes in the last session of the Federal Reserve this year, indicating a new strategy that could transform the global economy.
Positive effects on cryptocurrencies:
1. Increased attractiveness of risky assets: Lower interest rates weaken the attractiveness of bonds and bank deposits, pushing investors towards higher-yielding assets such as cryptocurrencies.
2. Increased liquidity: With the cost of borrowing falling, we may see a greater influx of funds into the cryptocurrency market, boosting demand and driving up prices.
3. Market Recovery: If the pressure on the US dollar continues as a result of accommodative policy, cryptocurrencies may benefit as an alternative haven.
Challenges and negative effects:
1. Market Volatility: Sudden decisions often lead to short-term volatility, which can unsettle new investors or raise concerns about stability.
2. Competition with stocks: Some investors may prefer to go for the stock market, which may witness a parallel recovery.
3. Concern about future policies: Will this cut be the first in a series of cuts? Or just a temporary adjustment?
Future predictions for digital currencies:
Short-term: Positive momentum is expected to increase, especially for coins like Bitcoin and Ethereum, thanks to liquidity inflows and increased demand.
Long-term: This decision may be part of a new economic environment that supports digital assets as a financial alternative, as large institutions increasingly rely on digital currencies.
In conclusion, this decision may be the beginning of a new chapter in the cryptocurrency market, where the opportunities seem enormous but the risks remain present. Are we facing a historic bull run or just a short break? Only the coming days will reveal the answer.
