With the FOMC meeting coming tomorrow, I've been looking at some of the potential outcomes…🤔
Tomorrow is the last FOMC meeting before Donald Trump takes office in just a few weeks. Economists are predicting that a 25 point basis cut will take place, making for the third consecutive cut.
Markets have already priced in the 25 point cut, leaving investors to look out for statements and projections from Chair Jerome Powell for insight on where future monetary policy may be headed. However, the FED could also take other actions outside of this, which would affect the crypto markets in different ways.
What does this mean for Bitcoin? 💰
Bitcoin just hit $108k, yet another ATH, and it is important to recognize the implications on the price and movement of BTC from the Fed's interest rate decision.
In the Case of a 25 Basis Point Cut:
Our base case scenario. Since this outcome has already been priced in, the short-term impact will probably not be significant.
50 Basis Point Cut:
We could see a 50 basis point cut, which would result in a very strong rally and positive price action, since lower rates promote bank lending and the purchase of risk-on assets. 📈
In the Case of No Cut:
Most bearish scenario here. Less liquidity flow is the likely outcome, as investors have less of an incentive to buy or hold Bitcoin with a stronger dollar. We would likely see a large correction in the markets. 📉
My Stance:
I think that the Fed will go through with a 25 basis point reduction, as expected, and we might see some near-term volatility at the announcement, but in general everything should stay the same.I think it is unlikely we see anything more than 25, and I highly doubt the Fed will take no action at all.
I think 25 basis points is the best case, with momentum high and more and more adoption coming to cryptocurrency every single day. Let me know what you guys think down below 👇
Tomorrow is the last FOMC meeting before Donald Trump takes office in just a few weeks. Economists are predicting that a 25 point basis cut will take place, making for the third consecutive cut.
Markets have already priced in the 25 point cut, leaving investors to look out for statements and projections from Chair Jerome Powell for insight on where future monetary policy may be headed. However, the FED could also take other actions outside of this, which would affect the crypto markets in different ways.
What does this mean for Bitcoin? 💰
Bitcoin just hit $108k, yet another ATH, and it is important to recognize the implications on the price and movement of BTC from the Fed's interest rate decision.
In the Case of a 25 Basis Point Cut:
Our base case scenario. Since this outcome has already been priced in, the short-term impact will probably not be significant.
50 Basis Point Cut:
We could see a 50 basis point cut, which would result in a very strong rally and positive price action, since lower rates promote bank lending and the purchase of risk-on assets. 📈
In the Case of No Cut:
Most bearish scenario here. Less liquidity flow is the likely outcome, as investors have less of an incentive to buy or hold Bitcoin with a stronger dollar. We would likely see a large correction in the markets. 📉
My Stance:
I think that the Fed will go through with a 25 basis point reduction, as expected, and we might see some near-term volatility at the announcement, but in general everything should stay the same.I think it is unlikely we see anything more than 25, and I highly doubt the Fed will take no action at all.
I think 25 basis points is the best case, with momentum high and more and more adoption coming to cryptocurrency every single day. Let me know what you guys think down below 👇