Fed comment from Binance CEO Teng: It will have a big impact on crypto

Richard Teng, who is the name at the helm of Binance, the world's largest stock exchange, commented on the eagerly awaited Fed meeting. Teng stated that he thinks interest rate cuts will bring significant increases in cryptocurrencies.

Binance CEO Richard Teng painted an optimistic picture of the future of the crypto and digital asset markets, with possible interest cuts from the US Federal Reserve (Fed). Teng emphasized that the drop in interest rates could lead to significant increases in cryptocurrencies.

Low interest rates increase liquidity

The CEO of Binance, who made evaluations on the subject, stated that low interest rates always provide liquidity in the world and said

“We predict that the expected interest rate cuts will have a major impact on digital asset and crypto prices. Low interest rates provide liquidity to the financial system, which increases the demand for high-yield, risky assets such as crypto. For example, between February 2020 and February 2022, Bitcoin increased by 375% during the period when interest rates were close to zero.

“Worries can lead to crypto”

Teng stated that he thinks the declines 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 lead some investors to cryptocurrencies to maintain their purchasing power. In addition, with the weakening of the dollar, more investors can consider digital assets as an alternative store of value”

“Not just interest rate cuts...”

The CEO of Binance stated that the expectation of the rise in cryptocurrencies is not only related to interest rate cuts, halving and Bitcoin spot ETFs may also support the increases in this period:

“Bitcoin's recent halving event has historically led to price increases after 6 to 18 months. In addition, the launch of spot ETFs could provide smoother transitions from stocks to crypto and allow increased liquidity with interest cuts to turn to the crypto markets.”