Fed’s Rate Cut Will Boost Bitcoin: Bitwise

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There is widespread anticipation that the US Federal Reserve will make its first benchmark rate cut in four years this week, leading to speculation about the potential size and impact of the cut on risk assets such as Bitcoin.

Traders who speculate on interest rates have changed their expectations, now predicting a 50 basis-point cut at the upcoming Federal Open Market Committee (FOMC) meeting, instead of the previously expected 25 basis-point reduction.

This is supported by data from the CME FedWatch tool, which shows a 65% probability for a 50 basis-point cut, surpassing the 35% probability for a 25 basis-point cut.

Only a few days ago, the majority of the market believed there was a two-thirds chance of a 25 basis-point cut, with only a one-third chance of a 50 basis-point cut. Some analysts believe that a 50 basis-point cut could elicit a positive reaction in the market for risk assets, including Bitcoin.