The first rate cut in 4 years, the crypto market performed well
This rate cut has been waiting for four years, but the financial market has performed differently before and after the announcement of the rate cut. The three major U.S. stock indexes all turned down, erasing the gains since the Fed announced the interest rate decision. In addition, spot gold has also completely given up the gains since the Fed’s interest rate decision was announced. On the other hand, the crypto market has risen across the board, and BTC has once risen to more than $62,500.
According to Chris Aruliah, head of institutional business at Bybit, the Fed’s recently announced 0.5% rate cut may prompt funds to flow from banks to the stock market and increase investment in high-risk assets including cryptocurrencies. As lower interest rates reduce the returns of traditional investment tools, investors may use cryptocurrencies to diversify their portfolio risks. However, the global economic slowdown, weak economic indicators and geopolitical uncertainties still hit investor sentiment. Although the rate cut may be good for the crypto market in the short term, investors need to remain vigilant under the current volatility.
The Fed’s rate cut can be said to have brought new hope to the financial market, especially the crypto market. The generally excellent performance of cryptocurrencies, led by Bitcoin, once again proves the vigorous vitality of emerging assets. What is most worth looking forward to is that many institutions are generally optimistic about continued interest rate cuts this year, which also means that a new cycle of the crypto market is on the way.
