$BTC Hello, everyone! Today let's talk about the Federal Reserve's latest action - a 25 basis point rate cut! This is a big event for our crypto world.

News Overview

According to the latest news, the Federal Reserve cut rates by 25 basis points in May, lowering the federal funds rate to 2.7%. This is the second rate cut of the year (the FOMC meeting is expected to have one more rate cut this year, with a probability of about 17%). Currently, market expectations for continued rate cuts by the Federal Reserve have reached as high as 97.3%! If there is another 25 basis point cut by the end of the year, the rate will drop to 2.4%, with a cumulative cut potentially reaching 50 basis points. However, there is also considerable volatility in market expectations for rate cuts, with a 0.8% chance of no rate cut this year.

Analysis of the impact of rate cuts on the crypto world

Increased liquidity benefits the crypto market

A rate cut by the Federal Reserve means that market liquidity will increase, funding costs will decrease, and more capital may flow into risk assets, such as our cryptocurrencies! Historically, rate cut cycles have often served as a catalyst for the rise of mainstream coins like BTC and ETH. Especially for BTC, it may welcome a wave of capital influx, so everyone can keep an eye on it.

Market sentiment is high, short-term volatility intensifies

The 97.3% expectation for a rate cut indicates that market sentiment is very optimistic, but the 0.8% probability of no rate cut also reminds us that market volatility may intensify. In the short term, altcoins may experience significant fluctuations, so we advise everyone to manage risks and avoid chasing highs!

Long-term trend: a rate of 2.4% may become a key point

If the rate really drops to 2.4% by the end of the year, it would be a great boon for the crypto world! In a low-interest-rate environment, investors are more inclined to seek high-yield assets, and the crypto market may attract more institutional funds. However, a cumulative rate cut of 50 basis points may also overheat the market, so everyone should be wary of the risk of policy shifts in the future.