Richard Teng, head of Binance, the world's largest stock exchange, commented on the long-awaited Fed meeting. Teng stated that he thinks the rate cut will bring a significant boost to cryptocurrencies.
Binance CEO Richard Teng has painted an optimistic picture of the future of the cryptocurrency and digital asset markets, with the possibility of the US Federal Reserve (Fed) cutting interest rates. Teng emphasized that the rate cut could lead to a significant increase in cryptocurrencies.
Low interest rates increase liquidity
Binance CEO, who gave his assessment on the matter, stated that low interest rates always provide liquidity in the world and said
“We expect that the expected rate cuts will have a major impact on digital asset and cryptocurrency prices. Low interest rates provide liquidity to the financial system, increasing demand for risky, high-yield assets such as cryptocurrencies. For example, Bitcoin increased 375% from February 2020 to February 2022 during a period of near-zero interest rates.
“Anxiety Can Lead to Cryptocurrency”
Teng stated that he thinks the drop in interest rates will be reflected not only in price increases but also in investor behavior:
“Lower interest rates could fuel inflation concerns, which could prompt some investors to turn to cryptocurrencies to maintain their purchasing power. Additionally, with the weakening dollar, many investors may see digital assets as an alternative store of value.”
“Not just cutting interest rates...”
Binance CEO stated that the expectation of a crypto surge is not only related to interest rate cuts, the halving and Bitcoin spot ETFs could also support the surge during this period:
“The recent Bitcoin halving event has historically led to a price increase after 6 to 18 months. Additionally, the launch of spot ETFs could provide a smoother transition from stocks to crypto and allow increased liquidity with interest rate cuts to move into the crypto market.”
