The Fed’s Move Sparks a $2.9 Trillion Crypto Boom Amid Economic Turmoil!

Jakarta, Pintu News – The Fed has again delayed raising interest rates for the second time under Trump, keeping it in the range of 4.25%-4.50%. This decision instantly sparked a resurgence in the crypto market, with a surge in value of up to $2.9 trillion!

Now, investors are starting to speculate on the possibility of an interest rate cut after the Fed made revisions to its GDP projections. The central bank continues to monitor economic conditions, inflation, and job growth.

However, the Fed now expects the number of rate cuts this year to be fewer, with only 11 of the 19 FOMC members expecting at least two cuts, down from 15 members last December.

Slower Balance Sheet Reduction Begins April

Crypto analyst MartyParty highlighted that the Federal Reserve will slow down the Quantitative Tightening (QT) policy from April 1, 2025, according to his prediction.

Read also: Top 3 Crypto Potentials According to ARK Invest CEO, Cathie Wood!

This means that the Fed will reduce the pace of balance sheet reduction, signaling a change in monetary policy.

Under the announced plan, the Fed will cut monthly Treasury redemptions from $25 billion to $5 billion, while the limit for agency debt and mortgage-backed securities (MBS) remains at $35 billion.

This move aims to maintain financial stability while gradually reducing the Fed’s asset holdings.

Impact on Crypto Market

Crypto analyst Fefe Demeny emphasized that Quantitative Tightening (QT) will not end anytime soon, although some crypto traders expect a bull market to occur as soon as Quantitative Easing (QE) begins.

Powell did confirm that the Fed will slow QT again, but the duration will be extended, meaning liquidity will not return to the market as quickly as expected.

According to Santiment, although Powell has confirmed plans for two rate cuts this year, projections for economic growth have now fallen to 1.7%, lower than the previous estimate of 2.1%.

Inflation remains a major concern, especially with the new tariffs potentially slowing down price stability. Following this announcement, both crypto and stock markets reacted positively.

Santiment also noted that the crypto market will likely continue to follow the movements of the S&P 500, although altcoins could experience higher volatility.

Read also: 4 Crypto You Should Dump Now If the Fed Holds Off on Rate Cuts!

Meanwhile, the crypto market has recovered even before the Fed meeting, with the market capitalization reaching $2.9 trillion (3/20/25). Bitcoin BTC->Current BTC PriceRp 0Market Cap-Trading Volume-Circulating Supply- surged past $85,000, while Ethereum ETH->Current ETH PriceRp 0Market Cap-Trading Volume-Circulating Supply-, Solana SOL->Current SOL PriceRp 0Market Cap-Trading Volume-Circulating Supply-, and XRP XRP->Current XRP PriceRp 0Market Cap-Trading Volume-Circulating Supply- rose 5%, 7%, and 10% respectively.

Enthusiasm is rising ahead of Trump’s speech at DAS, which is expected to address crypto policy going forward.

Powell warns of inflation and weakening consumer purchasing power

Federal Reserve Chairman Jerome Powell stated that the US economy is still in strong shape, but there are signs that consumers are starting to experience difficulties.

Inflation, although lower than before, is still at a fairly high level.

Powell also warned that new tariffs as well as changes in the global economy could slow down efforts to reduce inflation.

However, he emphasized that the Fed will continue to closely monitor economic developments and be ready to adjust policies if necessary.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities have high risk and volatility, always do your own research and use cold cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Coinpedia. Fed Rate Decision: Crypto Rebounds with a $2.9T Comeback Amid Economic Uncertainty. Accessed on March 20, 2025