2025/03/17 FED Rate Cut! Will it Rise?
Can a rate cut drive the rise in the cryptocurrency market?
Regarding this question, we can first refer to the impact on the U.S. stock market from the four rate cuts in the past 20 years!
The K-line in the chart represents the U.S. Nasdaq trend, while the pink line indicates the U.S. FED federal funds rate. It is evident here that the past four rate cuts did not drive the rise in U.S. stocks; rather, it was in a low-interest-rate environment that U.S. stocks had the momentum for continuous growth.
Additionally, the U.S. stock market and the cryptocurrency market are highly correlated, so when U.S. stocks rise, the cryptocurrency market will also rise. Currently, the FED rate is 4.33%, so to drop to a 1% rate level, it needs to decrease by 12 basis points.
According to the interest rate decisions, the maximum decrease in 2025 is 4 basis points, while in 2026 it must decrease by at least 8 basis points, thus allowing for a potential low-interest-rate level of 1% by 2027.
This means that the next bull market could potentially restart as early as 2027.
#Market analysis for reference only #Does not constitute investment advice
