As the financial world gears up for Jerome Powell’s keynote at the Jackson Hole Economic Symposium this Friday, the focus is on a potential 25 basis point rate cut at the Fed’s September meeting. This anticipated shift marks a significant change after more than two years of strict monetary policy. However, the crypto market is feeling the pressure, particularly Bitcoin (BTC-USD), which is struggling under these economic shifts and remains far from its all-time highs.
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Fed Signals Potential Rate Cut
Jerome Powell is set to signal a 25 basis point reduction in interest rates, a forecast that traders have already priced in. Recent FOMC minutes revealed broad support for this cut, though Powell is expected to caution against expecting a series of reductions. This approach aims to temper market expectations and maintain economic stability.
Bitcoin Continues to Lag Behind
While the S&P 500 and Nasdaq are close to their all-time highs and gold just hit a new record, Bitcoin is struggling. It’s currently trading at $60,616, which is a far cry from its peak of $73,500. Even though Bitcoin bounced back from a rough patch in early August, it hasn’t managed to ride the wave of good news like increased institutional interest or potential regulatory support.
What the Fed’s Move Means for Bitcoin
The Fed’s expected rate cut should pump some liquidity into the financial system, which usually helps stocks and gold. But Bitcoin hasn’t been able to benefit from this shift. Despite the Fed easing up, Bitcoin’s performance remains sluggish, and the cryptocurrency continues to lag behind traditional assets. With Bitcoin sitting at $60,616, it’s clear that the cryptocurrency is having a tough time making the most of these economic changes.
