2024

Jerome Powell

Bitcoin

Impact

<p>The recent FED decision to cut its key rates divides crypto analysts. While some hope for a boosting effect on Bitcoin, others fear a negative reaction. As the FED could start a cycle of rate cuts, a 50 basis point reduction, expected next week, could surprise the markets. This could affect risky assets, including Bitcoin, by highlighting deeper economic concerns.</p>
<h2 id="h-bitcoin-la-reaction-a-la-baisse-des-taux-par-jerome-powell">Bitcoin: The reaction to the rate cut by Jerome Powell</h2>
<p>The FED, after <a href="https://www.cointribune.com/en/the-fed-caves-in-and-vows-to-lower-its-rates/" target="_blank" rel="noopener noreferrer nofollow">capitulating</a>, is about to start <strong>a cycle of rate cuts</strong>, but according to <a href="https://www.coindesk.com/markets/2024/09/09/a-050-fed-rate-cut-could-raise-alarm-for-bitcoin-10x-research-warns/" target="_blank" rel="noopener noreferrer nofollow">10x Research</a>, this could sound the alarm for Bitcoin. An aggressive rate cut could signal <strong>economic concerns rather than confidence</strong>, putting pressure on risky assets like Bitcoin.</p>
<div class="my-4">
 <div class="ads " data-page-type="" data-location="1">
 </div>
</div>
<p>Currently, traders estimate <strong>less than a 30% chance for a 50 basis point cut next week</strong>. Indeed, such a decision could reflect growing concern about the economy, pushing investors to reduce their exposure to risky assets, including Bitcoin.</p>
<div class="affiliate-button"><a class="affiliate-button__link" href="https://bitpanda.pxf.io/c/2801338/1295465/15871" target="_blank" rel="noopener noreferrer nofollow">Discover the Bitpanda platform</a> <a class="affiliate-button__disclaimer" href="https://www.cointribune.com/en/sponsored-content/" target="_blank" rel="noopener noreferrer nofollow">This link uses an affiliate program.</a>
</div>
<p>Markus Thielen, founder of 10x Research, noted that this cut could indicate <strong>deeper economic concerns</strong>.</p>
<p>Conversely, <strong>a more modest cut could be perceived as a prudent measure</strong> rather than a signal of economic panic. This could mitigate the negative effects on Bitcoin and other risky assets.&nbsp;</p>
<p><strong>Hypotheses:</strong></p>
<ul>
 <li>A 50 basis point cut could signal increased economic concern, putting pressure on Bitcoin, potentially reducing its value by 5 to 10%;</li>
 <li>A more modest 25 basis point cut could be seen as a prudent measure, minimizing negative effects on Bitcoin and leading to limited fluctuation of 2 to 5%;</li>
 <li>Anticipation of a rate cut could already be priced into BTC, making the actual impact of the FED’s decision relatively weak, with expected variations around 3%.</li>
</ul>
<p>However, <strong>uncertainty about the actual size of the cut keeps BTC investors on their toes</strong>.</p> 
<div class="tradingview-widget-container tradingview--mini-chart">
 <div class="tradingview-widget-container__widget"></div>
 <div class="tradingview--mini-chart--dark">
  <script type="text/javascript" src="https://s3.tradingview.com/external-embedding/embed-widget-mini-symbol-overview.js" async>{"symbol":"BINANCE:BTCUSD","width":350,"height":220,"isTransparent":false,"autosize":false,"dateRange":"12M","trendLineColor":"rgba(253,64,19,1)","underLineColor":"rgba(253,64,19,0.6)","underLineBottomColor":"rgba(253,64,19,0)","locale":"en","largeChartUrl":false,"colorTheme":"dark"}</script>
 </div>
 <div class="tradingview--mini-chart--light">
  <script type="text/javascript" src="https://s3.tradingview.com/external-embedding/embed-widget-mini-symbol-overview.js" async>{"symbol":"BINANCE:BTCUSD","width":350,"height":220,"isTransparent":false,"autosize":false,"dateRange":"12M","trendLineColor":"rgba(253,64,19,1)","underLineColor":"rgba(253,64,19,0.6)","underLineBottomColor":"rgba(253,64,19,0)","locale":"en","largeChartUrl":false,"colorTheme":"light"}</script>
 </div>
 <div class="tradingview-widget-copyright"><a href="https://fr.tradingview.com/symbols/BTCUSD/?exchange=BINANCE" rel="noopener noreferrer nofollow" target="_blank"><span class="text-primary-color">BTCUSD chart</span></a> by TradingView
 </div>
</div> 
<h2 id="h-crypto-phare-impact-et-reactions">Key Crypto: Impact and Reactions</h2>
<p>The cycle of rate cuts could also affect the dynamics of cryptocurrencies. While some see <strong>rate cuts as an opportunity for cryptos</strong>, others warn of a potential correction. Here are some key points to consider:</p>
<ul>
 <li>A 50 basis point cut could signal economic urgency;</li>
 <li>Risky markets could react by reducing their exposure;</li>
 <li>Bitcoin has already experienced a strong rally due to rate cut expectations.</li>
</ul>
<p>Craig Shapiro, macro trader, points out that <strong>liquidity-hungry markets could push the FED to opt for a more significant cut</strong>, but current price levels of risky assets could lead to a correction.</p>
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper">
  <div class="entry-content-asset">
   <div class="social-embed-container">
    <blockquote class="twitter-tweet" data-width="500" data-dnt="true">
     <p lang="en" dir="ltr">The Fed doesn't want to start with a 50bps cut because frankly, at this point, the economy doesn't need them to panic. <br><br>The market wants them to start with 50 and go bigger and faster because the market acts like a petulant child in constant need of "moar" liquidity. I have…</p>— Craig Shapiro (@ces921) <a href="https://twitter.com/ces921/status/1832090295535829090?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 6, 2024</a>
    </blockquote>
    <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
   </div>
  </div>
 </div>
</figure>
<p>The FED might not want to cause premature panic, preferring to avoid too large a first cut. This could delay any substantial reaction in the crypto market.</p>
<div class="my-4">
 <div class="ads " data-page-type="" data-location="2">
 </div>
</div>
<p>Despite fears of this decision having a detrimental effect on Bitcoin, some experts believe the FED could, paradoxically, pave the way for <a href="https://www.cointribune.com/en/bitcoin-the-fed-paves-the-way-for-100000/" target="_blank" rel="noopener noreferrer nofollow">Bitcoin to reach $100,000</a>.</p>

50 Basis Points Cut By The Fed, An Imminent Danger For Bitcoin?

Table of Contents

Cointribune EN

Other articles published on Sep 9, 2024

Bitstaker Achieves $165 Million TVL Milestone, Innovates with Cutting-Edge Technology

QNT Price rallies following regulatory green light for staking

AVAX Gains Momentum: A Rally Toward $32 in Sight?

Crypto firm’s CEO resigns after being robbed of company funds at gunpoint

Analysts Say Bitcoin Remains Cheap, Investors Await US Election Results! Here Are the Details

UK Parliament could summon Elon Musk over X operations

Join our free newsletter for daily crypto updates!