The Federal Reserve Open Market Committee (FOMC) announced a 25 basis point reduction in interest rates on Wednesday, lowering the target Federal Funds rate to 3.75%-4%.
Investors had already “fully priced in” Wednesday’s rate cut, as it was widely expected, according to Matt Mena, a market analyst at 21Shares. Mena also predicted:
“November has historically been a strong month for Bitcoin, with positive returns in 8 out of the last 12 years, averaging 46.02% returns. Overall, we maintain a moderately risk-on stance and see a realistic opportunity for Bitcoin to surpass its all-time high before the year’s end.”
Following the FOMC announcement, asset prices were mostly flat or fell slightly, with Bitcoin (BTC) experiencing a roughly 2.4% decline at the time of writing, after Federal Reserve Chair Jerome Powell’s remarks indicated divisions among FOMC members regarding a potential rate cut in December.
“The unexpected dissent from a regional Fed president indicates that future decisions are becoming increasingly contentious,” said Michael Pearce, deputy chief US economist at Oxford Economics, in comments shared with Cointelegraph.
The rising dissent within the FOMC suggests a deeply divided Fed, which could impact crypto prices by limiting the liquidity available for digital and other risk-on assets.
Related: US Bitcoin and Ether ETFs rebound as Powell signals rate cuts
Market participants assess the chances of further rate cuts in 2025
The Federal Reserve initiated the 2025 rate-cutting cycle in September with a 25 basis-point cut, which helped propel BTC prices to record highs of over $125,000.
More than 56% of market participants anticipate the Fed will lower interest rates to a target range of 3.5%-3.75% in December, according to data from the Chicago Mercantile Exchange (CME).
In September, several leading commercial banks, including Bank of America, Citigroup, and Goldman Sachs, predicted at least two rate cuts in 2025.
While such cuts typically stimulate asset prices, the anticipated reductions might be overshadowed by the uncertainty arising from trade tensions between China and the US, leading to investor hesitancy.
Magazine: Crypto traders ‘fool themselves’ with price predictions: Peter Brandt
