Bitcoin is currently trading between $116,000 and $119,210, while Ethereum hovers around $3,600 to $3,870. The market sentiment is cautiously optimistic but uncertain – all eyes are on one thing: the decision by the U.S. Federal Reserve. This week, that decision could trigger a market avalanche.
🔹 Barron Warns: A Single Fed Move Could Change Everything
Well-known crypto commentator Paul Barron stirred up debate on X (formerly Twitter) with a hypothesis: what if the Federal Reserve unexpectedly cuts interest rates this week? While markets assign only a 24% probability to such a move (compared to 81% for September), Barron believes the impact would be explosive.
“A rate cut could instantly ignite a bullish wave across stocks, cryptocurrencies, and real estate,” he stated. History shows that similar actions help the S&P 500, increase the appeal of growth stocks, and reduce mortgage rates – stimulating housing demand.
But crypto would be the sharpest weapon again. Lower rates = cheaper money = more capital in risk assets. While XRP or ADA might first undergo a profit-taking dip, a strong recovery could follow.
🔹 Deaton: A Rate Cut Could Spark Another Crypto Boom
Crypto advocate and attorney John E. Deaton shares this optimism. On X, he noted that if Fed Chair Jerome Powell does decide to cut rates, it could significantly lift digital asset prices. For Deaton, this would be a clear bullish signal for the crypto market.
🔹 Prediction Markets Remain Cautious
Despite all the talk, prediction platforms remain skeptical. For example, Polymarket gives a 96.3% chance that interest rates will remain unchanged on July 29–30. Only 3% expect a 25-basis-point cut, and larger moves are virtually ruled out.
⚠️ But Beware – It's Not Without Risk
Barron also highlights that a surprise rate cut could have a dark side. If the Fed moves due to concerns about economic weakness, it could spark panic. In such a case, fears of stagflation – a dangerous combination of rising prices and slowing growth – may emerge.
Moreover, if wages outpace productivity, inflation could return with a vengeance. And that would be bad news for crypto and other assets.
📌 Summary
The Fed’s July decision is one of the most closely watched events of the summer. A surprise rate cut could set off a growth spiral – especially for risk assets like Bitcoin and altcoins. But it all depends on the motive. Will it be growth or fear?
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