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Nexo
Nexo
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The Federal Reserve's interest rate decision is coming today—how will this impact Bitcoin's performance? The market has effectively already priced in the eventual outcome: according to CME Fedwatch data, the probability of a 25 basis point rate cut is as high as 94%. But the real story lies in the context. Let's analyze it. 🧵 The S&P 500, Bitcoin (BTC), and gold prices are hovering near all-time highs, while core inflation remains above 3.1% and the labor market revision has erased over 900,000 jobs. @BankofAmerica analysts expect a pause until December after this rate cut and warn that inflation will persist above 3%. Federal Reserve policy adjustments often amplify the macro backdrop for Bitcoin (BTC). During the 2019 mid-cycle "insurance" rate cut, Bitcoin (BTC) rallied from $7,000 to $12,000 as liquidity returned to the market. Today, we may be on the verge of a soft landing, with $BTC taking the lead, followed by $ETH, and other high-quality altcoins following suit. Traders have reduced their downside hedging. Demand for options downside protection has cooled, suggesting a decrease in market panic. If Powell sticks with a 25 basis point rate cut, a moderate, gradual increase is likely. A 50 basis point cut could trigger a stronger rally in $BTC and $ETH. In the three months following the rate cut, $BTC has risen by approximately 62%, with an average gain of 16.5%. In the long term, a model charting the relationship between $BTC and gold predicts a target price of nearly $700,000 by 2035—the Fed's shift may not be immediate, but it is bullish for $BTC.
The Federal Reserve's interest rate decision is coming today—how will this impact Bitcoin's performance?

The market has effectively already priced in the eventual outcome: according to CME Fedwatch data, the probability of a 25 basis point rate cut is as high as 94%.

But the real story lies in the context. Let's analyze it. 🧵

The S&P 500, Bitcoin (BTC), and gold prices are hovering near all-time highs, while core inflation remains above 3.1% and the labor market revision has erased over 900,000 jobs.

@BankofAmerica analysts expect a pause until December after this rate cut and warn that inflation will persist above 3%.

Federal Reserve policy adjustments often amplify the macro backdrop for Bitcoin (BTC).

During the 2019 mid-cycle "insurance" rate cut, Bitcoin (BTC) rallied from $7,000 to $12,000 as liquidity returned to the market.

Today, we may be on the verge of a soft landing, with $BTC taking the lead, followed by $ETH, and other high-quality altcoins following suit.

Traders have reduced their downside hedging.

Demand for options downside protection has cooled, suggesting a decrease in market panic.

If Powell sticks with a 25 basis point rate cut, a moderate, gradual increase is likely. A 50 basis point cut could trigger a stronger rally in $BTC and $ETH.

In the three months following the rate cut, $BTC has risen by approximately 62%, with an average gain of 16.5%.

In the long term, a model charting the relationship between $BTC and gold predicts a target price of nearly $700,000 by 2035—the Fed's shift may not be immediate, but it is bullish for $BTC.