Fed’s December Rate Cut Probability High, Crypto Markets Alerted

CME’s FedWatch data indicates an 86.4% probability of a 25 basis point Federal Reserve rate cut in December following lower U.S. jobless claims, impacting cryptocurrency markets globally.

With potential monetary easing, market participants anticipate increased liquidity, driving volatility in Bitcoin and Ethereum. Upcoming FOMC meetings may further influence crypto-sector dynamics.

December Rate Cut: 86.4% Probability and Market Impact

An 86.4% probability of a 25 basis point Fed rate cut in December has been reported. CME FedWatch data reflects this sentiment following a drop in U.S. initial jobless claims, which has maintained these high probabilities. Speculative trading in cryptocurrencies is reacting with anticipations of more favorable investment conditions.

With busy market weeks ahead until the December 10 FOMC meeting, the implications of a rate cut on risk assets like Bitcoin and Ethereum are significant. Increased investor interest is likely, with past trends showing an appetite for risk during expanded monetary policies.

“The expectation of a Fed rate cut usually affects risk assets, including major cryptocurrencies such as Bitcoin and Ethereum.” — Binance CEO, Changpeng Zhao (CZ)

Bitcoin’s Sensitivity and Institutional Investment Trends

Did you know? Historically, rate cuts have often led to increased investment in riskier assets like cryptocurrencies.

Bitcoin (BTC), currently priced at $90,960.15 with a market cap close to `$1.82 trillion`, is experiencing noticeable activity. With a 24-hour trading volume of $37.47 billion, recent changes show a 4.53% increase over 24 hours. However, BTC faces a longer-term decline trend with a 30-day price dip of 16.73%. All data sourced from CoinMarketCap reveals a market adjusting to macroeconomic cues.

Coincu analysts suggest that a continued Fed rate cut trajectory might usher in increased crypto market activity and positioning. Should historical patterns repeat, the ongoing finance landscape may witness intensified regulatory and technological shifts, preparing the ground for potentially revamped market practices.