Headline: Fed’s Caution Dampens Hopes — Will More Rate Cuts Be Enough to Restart a Crypto Rally?
Since October the crypto market has failed to find sustained momentum, with losses tracing back to a wave of macroeconomic uncertainty. That slump followed a 25 basis-point rate cut in October that failed to boost risk appetite—and even a subsequent cut in December produced little follow-through for digital assets. The Federal Reserve has signaled more rate cuts may be possible, but officials stress they’ll proceed cautiously as inflation risks remain.
What the Fed minutes show
- Most Fed officials expect “further rate cuts” over time, but emphasize a cautious approach.
- Some members still view holding rates steady as appropriate “for some time” given lingering inflation uncertainties.
Why crypto hasn’t rallied
Investors have been shifting out of higher-risk assets and into traditional safe havens. Gold and silver have seen strong price action recently, hitting multiple all-time highs—evidence that capital has flowed toward perceived stability rather than into speculative markets like crypto. That large-scale risk aversion, combined with broader economic fragility, helps explain why two interest-rate easings in three months did not spark a crypto rebound.
October’s puzzling crash
October’s downturn was particularly notable because the month is historically bullish for crypto. Even with a Fed cut that month, markets tumbled—highlighting that rate moves alone aren’t the sole drivers right now. Without a meaningful improvement in the broader macro backdrop, another cut is far from a guaranteed catalyst for a sustained bull run.
Diverging forecasts for Bitcoin
- Bernstein and Grayscale are bullish on Bitcoin’s medium-term outlook, forecasting a new all-time high in 2026. Both argue BTC follows a 5-year cycle (peaking five years after the 2021 top), not the commonly cited 4-year cadence.
- At the other end, Barclays warns of headwinds in 2026, expecting a tougher market driven by reduced spot trading activity and weaker demand for crypto assets.
Bottom line
More Fed rate cuts could relieve some pressure on markets, but historical context and current capital flows suggest cuts alone won’t automatically trigger a crypto bull run. Traders and investors will likely be watching macro indicators, Fed guidance, and demand metrics (like spot trading volumes) to judge whether a genuine trend reversal is forming.
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