FED Rate Cut Potentially Trigger Crypto Price Spike? Here are the Details!

Updated

July 29, 2025

Gambar FED Rate Cut Potentially Trigger Crypto Price Spike? Here are the Details!

Jakarta, Pintu News – The crypto market may witness significant gains following the Federal Reserve’s (FED) sudden decision to cut interest rates.

Crypto analyst, Paul Barron, indicated that this unexpected move could trigger a big run-up in stocks, real estate, and cryptocurrencies, although the market is still skeptical.

Check out the full information in this article!

Analysis of the Impact of July’s Interest Rate Cut

According to Barron’s, the unexpected interest rate cut in July may trigger a wave of optimism across various markets. Stocks, technology, and real estate are expected to benefit from cheaper borrowing costs.

🔥WHAT IF THE FED CUTS RATES AT THIS WEEK'S FOMC? ⬇️
The BULLS would love this scenario: Markets expect just 24% chance of a July cut vs 81% for September, so a surprise move could trigger:
📈 Stock Market Rally: Historically, the S&P 500 posts positive returns 86% of the time 12… pic.twitter.com/7RmsIrkpSd
— PaulBarron (@paulbarron) July 27, 2025

Historically, the S&P 500 index has performed well after rate cuts, and growth stocks could rally due to increased valuations. Meanwhile, mortgage rates that may fall from 6.8% will boost housing demand. A weaker US dollar will support US exports.

For crypto markets, the impact could be huge; lower interest rates often favor risky assets, and digital currencies such as Ripple and Cardano , despite facing profit-taking, could regain momentum.

Market Predictions and Potential Reactions

Despite rumors of a reduced rate cut, prediction markets such as Polymarket Traders have put up 96.3% odds that rates will remain steady in the range of 4.25% to 4.50% during the meeting on July 29-30. Less than 3% of bets expect a 25 basis point cut, with very little chance of a larger cut or an increase.

President Trump @realDonaldTrump and his economic team, including @howardlutnick @SecScottBessent & @DavidSacks have earned a victory lap. If Powell and the @federalreserve lower rates, we will see asset prices, especially Crypto 🚀 https://t.co/XW5S5VPeod
— John E Deaton (@JohnEDeaton1) July 27, 2025

However, if the Federal Reserve decides to cut interest rates, this could be a signal of strength rather than panic. The market may respond positively if the cut is made to promote growth, rather than as a reaction to economic weakness.

However, if the rate cut is seen as a move made out of fear, it could be interpreted as a policy mistake and raise concerns about stagflation.

Risks and Long-term Implications

Just a slim 5% chance of cutting rates on July 30. https://t.co/ujr9PYV7xP
— José Mauricio Rozada (@jmrozada) July 28, 2025

While a rate cut sounds favorable, Barron’s also highlights some potential downside. The main risk is the return of inflation, especially if wage growth outpaces productivity.

The Federal Reserve is reportedly concerned about a “price-wage spiral” while the unemployment rate remains below 4%. In addition, there are concerns that a rate cut in July could signal economic weakness, which would destabilize consumer sentiment.

If the Federal Reserve acts out of panic rather than strength, this could be seen as a policy mistake, raising fears of stagflation, where the economy slows down while prices continue to rise.

Conclusion

With a potential interest rate cut by the Federal Reserve, the crypto market may be on the verge of a major rally. However, investors should remain wary of the risks of inflation and economic weakness that may arise as a result of this policy. The upcoming Fed decision is crucial and will determine the next direction of the market.

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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.

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