This Wednesday, the U.S. Federal Reserve is expected to cut interest rates for the first time in months. Many in the crypto world believe this move could push Bitcoin and other digital assets higher. But not everyone agrees. Some experts say the market may already expect this cut and that could lead to more confusion than celebration.
A lower interest rate means borrowing money becomes cheaper. As a result, investors often move their money out of low-risk assets like savings accounts and into higher-risk ones like stocks or cryptocurrencies. Kevin Rusher, founder and CEO of Regnum Aurum Acquisition Corporation (RAAC), explains it simply: “There’s over $7 trillion sitting in money market funds. A rate cut could release a lot of that money into the market—and crypto could benefit.”
Analysts at OneSafe, a global fintech platform bridging traditional and Web3 finance for start-ups, share a similar view. They say when money becomes cheaper and easier to move, investors start looking for better returns. That often leads them to fast-growing areas like crypto. Alice Liu from CoinMarketCap adds that coins like Ethereum and Solana — known for powering blockchain apps — usually rise faster when investor appetite for risk increases. “These are like tech stocks in the crypto world. They react quickly when the money starts flowing,” she said.
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Big Hopes, But Big Risks Too
Signs of the growing interest are already visible. A market tracker called the “Altcoin Season Index” jumped from 29 to 67 in the past month. That means traders are looking beyond Bitcoin and investing in smaller coins. Historical data also shows that riskier assets often do well after a rate cut, especially when the stock market is near all-time highs.
But some warn that the good news might already be “priced in.” In other words, if everyone expects a rate cut, there may not be much room left for surprise gains. Timothy Peterson, a market economist, says that could backfire. “If the Fed does something unexpected or delays cuts, the market could drop instead of rising,” he said.
Others say it’s not just about what the Fed does, but how investors react. CryptoNews analysts were quoted as saying that some investors may sell after the announcement, especially if the Fed doesn’t clearly commit to more cuts in the future. With 96% of traders already betting on a cut, even a small surprise could cause big price swings.
In short, a rate cut could help crypto prices rise, but it’s not guaranteed. Whether Bitcoin surges or stalls depends on investor confidence, market timing, and what the Fed says next.
