{"id":16207,"date":"2025-09-20T06:09:27","date_gmt":"2025-09-20T04:09:27","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=16207"},"modified":"2025-09-20T06:09:27","modified_gmt":"2025-09-20T04:09:27","slug":"crypto-set-for-a-boom-as-fed-actions-catch-markets-off-guard-says-economist","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/09\/20\/crypto-set-for-a-boom-as-fed-actions-catch-markets-off-guard-says-economist\/","title":{"rendered":"“Crypto Set for a Boom as Fed Actions Catch Markets Off Guard, Says Economist”"},"content":{"rendered":"

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Participants in the crypto market might be undervaluing how assertive the US Federal Reserve will be in adjusting its policy trajectory, an economist suggests.<\/p>\n

\u201cMarkets are undervaluing the chances of swift rate reductions in the upcoming months from the Federal Reserve,\u201d economist Timothy Peterson informed Cointelegraph on Friday.<\/p>\n

\u201cThere has never been a slow decline in rates like what is currently anticipated by the Fed,\u201d Peterson remarked, indicating that he foresees \u201cthe surprise effect\u201d to emerge, which could possibly catch the market off guard.<\/p>\n

\u201cIt will significantly elevate Bitcoin and altcoins, and I believe this will occur within the next 3-9 months.\u201d<\/p><\/blockquote>\n

Peterson’s remarks follow closely after the Fed executed its initial rate cut of 2025 on September 17 by 25 basis points. The rate reduction was broadly expected, as the CME FedWatch Tool indicated<\/a> a 96% likelihood of a quarter-point decrease and merely a 4% possibility<\/a> of a 50-point cut in the hours prior to the announcement.<\/p>\n

Market is predicting another rate decrease in October<\/h2>\n

Bitcoin (BTC<\/a>) briefly jumped to $117,000 hours before the Fed\u2019s announcement regarding the rate cut but has since pulled back to levels seen in the preceding days, trading at $115,570 at the time of writing, as per<\/a> CoinMarketCap.<\/p>\n

Bitcoin has risen 1.03% over the last 30 days. Source: <\/em>CoinMarketCap<\/em><\/a><\/figcaption><\/figure>\n

CME data reveals that market participants are factoring in a 91.9% likelihood of another 25 basis point rate reduction at the meeting on Oct. 29, with just an 8.1% chance that rates will remain the same.<\/p>\n

Related: <\/strong><\/em>Bitcoin price predictions target $110K as $4.9T options expiration approaches<\/strong><\/em><\/a><\/p>\n

Fed officials indicated<\/a> they anticipate two additional quarter-point reductions this year. However, Fed Chair Jerome Powell stated, \u201cWe\u2019re not on a predefined course.\u201d<\/p>\n

Financial institutions were divided on Fed\u2019s September decision<\/h2>\n

Several financial institutions expected a more forceful rate cut during the September meeting, with Standard Chartered predicting a 50 basis point reduction.<\/p>\n

Goldman Sachs CEO David Solomon<\/a>, on the other hand, was more assured that the Fed would maintain a 25 basis point cut.<\/p>\n

Reducing interest rates generally serves as a bullish signal for riskier assets, such as cryptocurrencies, since conventional investments like bonds and term deposits become less appealing to investors.<\/p>\n

Magazine: <\/strong><\/em>Meet the Ethereum and Polkadot co-founder who wasn\u2019t featured in Time Magazine<\/strong><\/em><\/a><\/p>\n