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Following the U.S. Federal Reserve’s (Fed) latest decision to cut interest rates by 50 basis points, the Bitcoin and altcoin markets have experienced a significant boost. At the same time, the news of a presidential candidate purchasing Bitcoin for the first time has stirred excitement. While investors are keeping a close eye on the market, there are concerns that this rally may be short-lived.
Fed Rate Cut Fuels Bitcoin Surge
The Fed’s 50 basis point interest rate cut has reinvigorated the crypto market, with Bitcoin gaining 2.4% to approach the $62,000 mark. According to CoinGecko, the total value of the cryptocurrency market increased by 1.7% following the decision. These developments have sparked hopes for short-term gains among investors.
What to Expect from the Fed’s Future Rate Decisions
Fed officials expect interest rates to drop to 4.4% by the end of the year, signaling the possibility of further 50 basis point cuts in the upcoming meetings. While this has fueled excitement, some analysts remain cautious about the sustainability of this rally.
Will the Bitcoin Rally Last?
Chris Aruliah, head of institutional affairs at ByBit, weighed in on the impact of the rate cut on the crypto market. Aruliah noted that the global economic slowdown and geopolitical risks have dampened investor sentiment. As a result, he believes the rate cut will only provide short-term support, urging investors to remain cautious amidst ongoing uncertainty.
Similarly, BitMEX founder Arthur Hayes shared his perspective, stating that while the rate cut may trigger a short-term rally, it could lead to larger economic challenges in the long run. If the Fed continues cutting rates, inflation may accelerate in the fourth quarter, presenting long-term risks for the Bitcoin market.
Will Rate Cuts Continue?
Investors on Polymarket believe there’s a strong chance that the Fed will continue its rate cuts. The probability of a 100 basis point cut by year-end is estimated at 41%, while a 125 basis point cut is considered 38% likely. Traders are closely watching the market in anticipation of further developments.
The Uncertainty Around Bitcoin’s Future Price
While the Fed’s rate cuts have provided a short-term boost to Bitcoin and the crypto market, experts are warning that this optimism may not last. The rate-cut-driven surge could soon be followed by volatility due to ongoing market uncertainties. Investors should remain cautious and monitor the market closely, as these uncertainties could impact crypto prices in the long term.
