Beware! Bitcoin Could See a Sharp Correction as Fed Cuts Rates
Arthur Hayes (CEO Maelstrom & founder Bit_MEX) made a bold statement that risk assets (including Bitcoin and Altcoins) could crash days after the first Fed rate cut.
At the TOKEN2049 conference in Singapore, Arthur Hayes explained that rate cuts could increase inflation and strengthen the Japanese Yen (JPY), causing massive selling pressure in the Crypto market.
However, this is the first time since 2020 that interest rate predictions have failed to reach a consensus of over 90%. This shows the hesitation and uncertainty of traders, which could cause strong volatility in financial markets after the news.
It should be noted that if the Fed cuts rates too quickly, it could cause inflation to flare up again. In the past, the Fed has only started a rate cut cycle with a cut of more than 0.25% twice: 2001 (during the Dotcom bubble) and 2007 (during the financial crisis).
In general, temporarily cut leveraged positions in the context of an uncertain market trend and facing a major change in global monetary policy to protect capital in the short term.
