Richard Teng, who is the name at the helm of Binance, the world’s largest stock exchange, commented on the much-anticipated Fed meeting. Teng stated that he thinks a rate cut will bring a significant boost to cryptocurrencies.
Binance CEO Richard Teng painted an optimistic picture for the future of the crypto market and digital assets, with the possibility of a rate cut from the US Federal Reserve (Fed). Teng stressed that a rate cut could lead to a significant increase in cryptocurrencies.
Low interest rates increase liquidity
Binance CEO, who made an evaluation on the subject, stated that low interest rates always provide liquidity in the world and said
“We expect the expected interest rate cuts to have a significant impact on digital asset and crypto prices. Low interest rates provide liquidity to the financial system, which increases demand for high-yielding risk assets like crypto. For example, between February 2020 and February 2022, Bitcoin increased by 375% during a period when interest rates were near zero.
“Concerns can lead to crypto”
Teng said he thinks the rate cut will not only be reflected in rising prices, but also in investor behavior:
“Lower interest rates could trigger inflation concerns, which could cause some investors to turn to cryptocurrencies to preserve their purchasing power. Additionally, with the dollar weakening, more investors may consider digital assets as an alternative store of value.”
“It's not just interest rate cuts...”
Binance CEO stated that the expectation of a cryptocurrency rally is not only related to interest rate cuts, Bitcoin halving and spot ETFs can also support the rally during this period:
“Recent Bitcoin halving events have historically led to a price rally after 6 to 18 months. Additionally, the launch of a spot ETF could provide a smoother transition from stocks to crypto and allow for increased liquidity with interest rate cuts to move into the crypto market.”
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