š¢ The minutes of the Fed's July meeting were released, signaling an upcoming rate cut!
š On August 21, the Fed released the minutes of its July meeting, suggesting that a 25 basis point rate cut might be in place in September. As soon as the document was released, the market was like a shot of chicken blood, and Bitcoin rose in response, with a 3.5% increase in 24 hours, and the price briefly touched more than $61,000.
š The logic behind the rate cut: The minutes also mentioned the reasons for the rate cut, mainly because inflation has improved recently and unemployment is also rising. If the rate cut does happen, the benchmark interest rate will drop from 5.25% to 5%, which is a 25 basis point cut.
š The news of the rate cut is good news for the cryptocurrency market, because the decline in bond yields will make cryptocurrencies look more attractive. Ethereum also followed suit and rose by more than 1.5% in a short period of time, but Solana was not so lucky and still fell by 0.6%.
š Interestingly, after the release of the minutes, expectations for a 25 basis point rate cut fell from 77% to 72%, while expectations for a rate cut of more than 50 basis points rose from 18% to 22%.
š However, while expectations of a rate cut in September have brought some optimism to the market, analysts at Bitfinex believe that the upcoming US presidential election may have a greater impact on the cryptocurrency market. Analysts point out that market uncertainty is increasing as the odds of the two candidates are getting closer.
š¤ Currently, Trump's chances of winning on Polymarket have risen back to 53%, while Harris's have fallen to 46%. Although the election results are still uncertain, analysts believe that if Trump's chances of winning have fallen to the bottom, then the market may start to rebound because the worst case scenario may have been digested by the market.
š¬ What do you think about the Fed's expectations of rate cuts and the potential impact of the US election on the market? Share your views in the comments section!
