Fed’s Potential Rate Cuts Spark Optimism in Crypto Market
The crypto market is buzzing with excitement after a Fed official hinted at upcoming interest rate cuts. Christopher Waller, a senior Federal Reserve official, suggested that the central bank might lower rates as soon as July. He pointed out the slowing economy and downplayed the impact of tariffs on inflation.
waller believes the Fed’s benchmark rate is above the neutral rate and said, “We can afford to bring it down and monitor inflation.” The Fed left rates unchanged at 4.25% to 4.50% recently, but hinted at two more cuts later this year.
Pressure from figures like Donald Trump, who wants a full-point cut, adds to the anticipation. Historically, crypto assets like Bitcoin and Ethereum thrive during Fed rate cuts. This was evident during the COVID pandemic in 2020 and 2021.
Data shows growing demand from Wall Street investors for these assets, possibly anticipating a Fed policy change. Spot Bitcoin ETFs saw $389 million in inflows on Wednesday, boosting monthly inflows to $2.28 billion. Over three months, inflows reached over $10 billion, totaling $46.65 billion.
Ethereum etfs also attracted nearly $1.5 billion in inflows in three months, with total inflows near $3.9 billion. These trends indicate a declining supply of Bitcoin and Ethereum on exchanges, suggesting a potential price rebound.
