Morgan Stanley's "Interest Rate Cut Bomb" Ignites the Crypto Circle: Can XRP Ride the Wind to Break the Deadlock?

As the market is still in shock over the sharp decline of XRP, Morgan Stanley dropped a heavyweight report late at night—stating that the Federal Reserve will start cutting interest rates in September, with cuts of 25 basis points in both September and December, injecting a "shot in the arm" into the volatile crypto market.

Behind this wave of expectations, Powell's "dovish" tone is key. At the Jackson Hole meeting, he shifted from emphasizing that "inflation risks remain" to mentioning that "pressures from a cooling labor market are increasing," implying that "the economy can't withstand further rate hikes." It should be noted that the Federal Reserve's stance directly influences the crypto market: the 2020 rate cuts pushed Bitcoin from $3,000 to $60,000, while rate hikes in 2022 devastated the crypto market; now, the "dovish" signals are akin to handing the market the "key" to liquidity.

Even more crucial is the political pressure from Trump behind the scenes. This former president has frequently attacked "high interest rates killing American businesses" at campaign rallies, and with the 2025 election approaching, the Biden administration risks losing votes if it doesn't cut rates. On one hand, economic data is calling for a "halt," while on the other, political pressure is pushing for a "cut"; the Federal Reserve's rate cut is already a foregone conclusion, and Morgan Stanley is confident in this prediction precisely because they see through this logic.

However, before the celebration, they must hit the brakes: the report warns that "strong non-farm payroll data could delay rate cuts." If next week's data exceeds expectations, all predictions could become illusory. At that time, Bitcoin and XRP could experience even crazier fluctuations, with a "roller coaster" ride of a 3% drop yesterday and a 5% rise tomorrow, posing a significant test for investor sentiment.

For XRP, a rate cut would originally be favorable—after the 2019 rate cut, it rose from $0.20 to $0.90, and in 2020, it soared from $0.15 to $1.90. Now, with XRP falling to around $2.80, if a rate cut materializes alongside ETF expectations, it could potentially surge to $4 or even $5; however, if the rate cut doesn't happen, it is uncertain whether the $2.60 support level can be maintained.