According to TechFlow, Coindesk reported that 10x Research believes that if the Federal Reserve cuts interest rates by 50 basis points (bps) on September 18, the originally bullish liquidity easing cycle may have an adverse impact on risky assets including cryptocurrencies.
It is reported that a 50 basis point adjustment usually indicates the urgency of controlling inflation and triggers risk aversion in financial markets. A 50 basis point rate cut next week could mean increased concerns about the economy or a sense of being behind in responding to the impending economic slowdown, leading investors to reduce their exposure to risky assets such as Bitcoin (BTC) and stocks.
“While a 50 basis point rate cut by the Fed could mean more concern for the market, the Fed’s primary focus will be on alleviating economic risks rather than managing market reactions,” Markus Thielen, founder of 10x Research, said in a note.
