Fed Rate Cuts: Positive Impact on DeFi Market
CryptoNewsTerminal Staff16 Sep, 2024
Fed Rate Cuts: Positive Impact on DeFi Market
In a recent report, Bernstein, a Wall Street investment bank, analysts predicted that the Federal Reserve's rate cuts could positively impact the decentralized finance (DeFi) market. The report highlights that the DeFi market primarily operates using the US dollar. Thus, a reduction in interest rates by the Fed would make DeFi yields more appealing compared to traditional finance (TradFi) yields. This could potentially drive increased global demand for DeFi, especially with the advancements in infrastructure. The report suggests that institutional investors may re-enter the crypto market due to these factors, leading to a rise in prices for digital assets. This news follows previous reports indicating a correlation between central bank policies and the cryptocurrency market. For instance, in April 2022, a report from Arcane Research showed that Bitcoin's price tends to move in line with the US dollar's value.
