The Federal Reserve Open Market Committee (FOMC) announced a 25 basis point decrease in interest rates on Wednesday, setting the target Federal Funds rate between 3.75% and 4%.
This reduction was “fully anticipated” by investors, who widely expected the decision, according to market analyst Matt Mena from investment firm 21Shares. Mena also predicted:
“Historically, November is one of Bitcoin’s top-performing months, showing positive returns in 8 of the last 12 years, with an average increase of 46.02%. Overall, we remain cautiously optimistic and see a viable path for Bitcoin to reach its all-time high by year-end.”
Following the FOMC announcement, asset prices either remained stable or decreased slightly, with Bitcoin (BTC) dropping approximately 2.4% at the time of this writing, prompted by Federal Reserve Chair Jerome Powell’s comments indicating that FOMC members are divided on a possible rate reduction in December.
“The unexpected hawkish dissent from a regional Fed president indicates that future decisions are becoming increasingly contentious,” stated Michael Pearce, deputy chief U.S. economist at Oxford Economics, as he shared insights with Cointelegraph.
The growing divisions within the FOMC suggest a deeply split Fed, which could negatively impact cryptocurrency prices by limiting liquidity that typically flows into digital assets and other riskier investments.
Related: US Bitcoin and Ether ETFs rebound as Powell signals rate cuts
Market participants assess the potential for further rate cuts in 2025
The Federal Reserve initiated the 2025 rate-cutting cycle in September with an initial cut of 25 basis points, which contributed to Bitcoin prices soaring to new heights exceeding $125,000.
According to data from the Chicago Mercantile Exchange (CME), more than 56% of market players anticipate the Fed will reduce interest rates further to a target range of 3.5%-3.75% in December.
In September, several leading banks, including Bank of America, Citigroup, and Goldman Sachs, predicted at least two rate cuts in 2025.
Typically, these cuts would bolster asset prices. However, the expected reductions may be clouded by the uncertainty created by ongoing trade tensions between China and the U.S., leading to cautiousness among investors.
Magazine: Crypto traders ‘fool themselves’ with price predictions: Peter Brandt
