The Federal Reserve is likely to cut interest rates as President Trump increases pressure on Fed Chair Jerome Powell.
The United States Federal Reserve is on the verge of cutting interest rates owing to President Trump’s pressure to do so. In the past week, the U.S president said interest rates could be lower if Fed Chair Powell “understood what he was doing.”As the chances of rate cuts rise, crypto investors have been debating how this could affect digital assets.
When the Fed cuts rates, there is more liquidity in the markets available to investors. Also, new, freshly printed dollars hit the market searching for new homes through investments. Investors are likely to pour this new liquidity in the form of smart money into hard and scarce assets.
Digital assets like Bitcoin, also considered the “digital gold,” have been appealing to the smart money since the start of the year. This means a significant sum of money could flow into BTC and other digital assets as investors optimize portfolio returns. Considering the potential gains on crypto, the availability of capital increases the appetite for risks. In other words, the market could see a major bull rally as Powell considers cutting interest rates in the coming weeks.
