Fed's Interest Rate Cut: 50 bps Positive for Crypto, 25 bps Hurts
CryptoNewsTerminal Staff17 Sep, 2024
Fed's Interest Rate Cut: 50 bps Positive for Crypto, 25 bps Hurts
The founder of crypto fund Asymmetric, Joe McCann, recently discussed the potential impact of the Federal Reserve's upcoming interest rate cut on the cryptocurrency market. McCann believes that a 50 basis point cut would be positive for crypto, while a 25 basis point cut could have the opposite effect. He points to the strong correlation between the stock market and the cryptocurrency market, and notes that stocks have been performing well on expectations of a 50 bps cut. However, if the Fed only cuts rates by 25 bps, McCann believes that both stocks and crypto could suffer. This is because it would signal that the Fed is not as confident in the economy as investors had hoped. McCann also addressed the view that a 50 bps cut could signal a recession, which would lead to a bear market in crypto. He emphasized that the current U.S. economy is fundamentally different from the economy that preceded the 2008 financial crisis. The current economy is growing at a healthy pace, and there is no evidence to suggest that a recession is imminent. Overall, McCann's analysis suggests that a 50 bps cut would be a positive catalyst for crypto, while a 25 bps cut could have a negative impact.
