BloFin Research Analysis: Why the Fed’s Recent Policy May Not Trigger a Year‑End Crypto Rally
The Fed's recent policy actions, aimed at banking liquidity, are unlikely to spur a major year-end crypto rally due to limited risk appetite and elevated long-term rates.Summary
The Federal Reserve's latest FOMC decision, which included a third consecutive rate cut but signaled little appetite for further easing amid divided views on inflation and labor, is primarily focused on stabilizing short-term banking liquidity via T-bill purchases and SRF adjustments, not stimulating asset prices. This move benefits stocks and weakens the dollar, but the crypto market, being dollar-denominated and facing limited investor risk appetite, struggles to compete with precious metals and stocks. Market pricing reflects conservative expectations, with long-term Treasury yields remaining high, suggesting a continued liquidity drought for riskier assets. Consequently, smart money sentiment remains bearish long-term for BTC and ETH, viewing short-term rebounds as speculative. The analysis suggests a defensive crypto strategy, such as using gains from stable assets like the 'Mag 7' to fund put protection, or reducing overall exposure, as holding crypto offers little comparative advantage over T-bonds currently. Holding Euros is suggested as a reserve currency alternative due to the constructive long-term outlook for the Euro against the weakening dollar.
(Source：BeInCrypto)