Rate Cut Odds Surge After Powell, Lifting BTC and ETH
Federal Reserve Chair Jerome Powell signaled a cautious shift toward interest rate cuts, driving September rate cut odds on Polymarket from 57% to 78%. Markets reacted immediately. Bitcoin (BTC) jumped from under $112,000 to over $117,000, while Ethereum (ETH) and BNB set fresh highs. Traders now focus on the next FOMC meeting, where a 25 bps cut is widely anticipated. Expert Marcin Kazmierczak of RedStone noted that measured Fed easing could give ETH an edge, potentially breaching the $4,800–$5,000 resistance. Still, Powell’s data-dependent stance means any rally must be underpinned by real adoption. The renewed rate cut odds highlight increased risk-asset demand and underscore volatility ahead.
Bullish
Powell’s shift toward potential rate cuts historically fuels risk assets. In past easing cycles, crypto rallied as liquidity rose and borrowing costs fell. The spike in rate cut odds suggests traders expect looser monetary policy, boosting BTC and ETH. Short-term, this view may drive further price gains and volatility around FOMC announcements. Long-term, sustained lower rates could underpin continuous inflows into crypto, especially if adoption metrics improve. However, Powell’s emphasis on data-dependence warns that fundamental adoption will be crucial to maintain momentum beyond speculative moves.