Fed's Dovish Pivot: Rate Cut Signals Crypto's Next Leg Up!
As the Federal Open Market Committee wraps its October 28-29, 2025, meeting today, markets are laser-focused on a near-certain 25 basis point trim to the federal funds rate, dropping it to 3.75%-4.00%—the second cut this year. This move, baked in at 99% odds via CME FedWatch, stems from cooling inflation (CPI at 3% YoY) and labor market jitters, with unemployment ticking toward 4.3%.
Fed Chair Jerome Powell's post-meeting tone could hint at December's encore and 2026's deeper easing to a neutral 2.75%-3.00% range, amid government shutdown data gaps.
For crypto natives, this is pure rocket fuel. Dovish policy unleashes "risk-on" euphoria, slashing yields on fiat alternatives and weakening the dollar—historically catnip for Bitcoin and Ethereum. Post-September's cut, BTC rallied 32% YTD to $115,000, while ETH held $4,100, buoyed by ETF inflows topping $3.4B.
Lower discount rates amplify these long-duration assets' valuations, drawing institutional liquidity like Strategy's fresh 390 BTC grab ($43M).
Yet, diminishing returns loom: September's easing saw BTC dip 7% initially as markets front-ran the pivot. Watch for QT's potential end—a stealth liquidity booster signaling inflation tolerance. On-chain, LTHs hoard 60% supply, absorbing dips; STH capitulation at $113K realized price could spark the flip.
Expect a "buy the dip" frenzy, with BTC eyeing $120K and ETH $4,500 by Q1 2026. Crypto's macro beta is maturing—position for abundance, not scarcity. HODL tight; the Fed's blink is our green light.
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