After a long hiatus, the FED made its first rate cut in September. Experts expect more rate cuts in the near future, which could have a positive impact on Ethereum (ETH) prices.
In a recent report, the digital asset company FalconX highlighted that if the FED continues to lower interest rates, ETH is expected to see significant price gains. FalconX emphasized that Ethereum staking returns could surpass U.S. interest rates in the coming year, creating new opportunities for investors.
Staking Could Drive ETH Prices Higher
FalconX anticipates that with more FED rate cuts in the coming quarters, interest rates will fall, narrowing the gap between U.S. interest rates and ETH staking returns, which currently stand at around 3.2%. With U.S. interest rates expected to drop below 3.75% by March 2025, Ethereum staking returns could become more attractive, drawing in more investors and driving up Ethereum prices.
David Lawant, Head of Research at FalconX, explained:
“We haven’t seen how Ethereum’s staking returns compare to interest rates during a full-blown crypto bull market yet. The only time ETH staking rates significantly outperformed interest rates was at the end of 2022, during the market’s lowest point when the FTX collapse hit.”
Lawant added, “However, the current bull market could generate even higher staking rewards, leading to a substantial price increase for ETH.”
Ethereum Price Outlook
Despite the potential long-term benefits, Ethereum has seen a slight decline in the short term, with the price dropping by 1.5% in the last 24 hours. At the time of writing, Ethereum is trading around $2,600.
As investors weigh the potential impact of future FED rate cuts on Ethereum staking, the market could see increased demand for ETH, potentially pushing prices higher in the coming months.
