FedWatch Data Shows Possible Fed Rate Cut Impacting Crypto

2 mins mins

Key Points:

CME projects a 39.8% chance of a Fed rate cut in May 2025.
A rate cut could enhance liquidity in the cryptocurrency market.
Bitcoin’s historical trends show significant price surges following previous rate cuts.

As of April 13, 2025, Bitcoin trades at $84,016.65, with a market cap of $1.67 trillion and a 24-hour volume of $26.29 billion, per CoinMarketCap. Despite recent declines, the cryptocurrency holds a 62.58% market dominance, reflecting its continuing market influence.

Coincu analysts predict that any Federal Reserve rate reduction could lower borrowing costs, increasing market liquidity and stimulating cryptocurrency investments. Historical data indicates positive outcomes for cryptocurrencies during favorable macroeconomic conditions.

FedWatch Projections Signal 39.8% Chance of May Rate Cut

FedWatch data indicated a possible rate cut as early as May. Economic analysts are assessing the potential implications, with Bitcoin and altcoins in focus. The probability of a cut, according to CME, stands at 39.8%, while no change remains more likely at 60.2%.

A 25 basis point cut may enhance liquidity, encouraging investment in riskier assets, such as cryptocurrencies. Bitcoin’s recent performance suggests potential for further gains, especially if the Fed adopts a looser monetary policy.

“A rate cut could unlock unprecedented liquidity in the market, which historically has favored assets like Bitcoin,” mentioned Mike Novogratz, CEO of Galaxy Digital, reflecting on past trends and potential outcomes.

Historical Correlations and Potential Crypto Gains Analysis

Did you know? In 2019, Federal Reserve rate cuts were linked to significant Bitcoin price surges, emphasizing the correlation between macroeconomic policy and cryptocurrency market trends.

Market analysts highlight the absence of direct comments from prominent crypto figures about the FedWatch predictions. However, growing optimism exists regarding market trends. With no change currently more probable, the rates decision remains pivotal.