Binance FED Report: Interest Rate Decision Could Support Bitcoin and Altcoins!

According to research conducted by Binance, the decision to be taken by the Fed could support Bitcoin and altcoin markets.

The Federal Open Market Committee (FOMC), which determines the monetary policies of the US Federal Reserve (Fed), will meet today. At the last Jackson Hole Symposium, Fed Chairman Jerome Powell stated that it was time to change monetary policy. Following this statement, expectations that interest rate cuts would begin at the FOMC meeting increased.

It could support the cryptocurrency market

The report prepared by the Binance team said, “Lower borrowing costs mean that prices of digital assets, especially Bitcoin, may increase. Historically, cryptocurrencies have reacted negatively to interest rate hikes, while interest rate cuts usually trigger an upward trend. Low interest rates can increase liquidity and strengthen demand for risky assets.”

Experts predict that the Fed could reduce interest rates by up to 175 basis points in the next nine months. Stating that these discounts could support the cryptocurrency market, the Binance team commented, “Low interest rates can trigger inflation concerns as they usually increase spending and borrowing. In such a case, investors may turn to cryptocurrencies to maintain their purchasing power, which can cause demand and prices to increase.”

Factors such as Bitcoin’s last halving event in April 2024 and the interest rate cut cycle can create additional upside potential for digital assets. Therefore, the decisions to be taken at the FOMC meeting in September may start a new bullish period for crypto markets.