SUMMARY

• The Federal Reserve cut rates by 50 basis points, with expectations of reaching a 4.4% median benchmark rate by year-end, sparking mixed reactions in the crypto market.
• Cryptocurrencies like SOL, BNB, XRP, and ADA gained, with SOL leading at a 6% increase, while market bets indicate further rate cuts are anticipated.

A 50-basis point rate cut by the Federal Reserve and the first Bitcoin purchase by a presidential candidate kept digital resources solid amid East Asia’s trading day. However, a few market analysts are doubtful about the lifespan of this rally. The Fed’s quarterly economic projections show further cuts, with the median benchmark rate anticipated to drop to 4.4% by year-end, signaling another 50 basis points of cuts over the following two Federal Open Market Committee meetings.

Bitcoin rose to near $62,000, up 2.4% in the past 24 hours, whereas the broader crypto market also saw rallies, with Solana’s SOL leading the way with a 6% rise. Other major cryptocurrencies, including BNB, XRP, and Cardano’s ADA, experienced increments of up to 4.5%. Memecoins like Dogecoin and Shiba Inu moreover saw notable increases.

Despite this, traders stay cautious. ByBit’s Head of Institution, Chris Aruliah, communicated a mixed viewpoint, citing that whereas the rate cut may give a short-term boost, broader economic vulnerability could temper gains. Maelstrom’s Arthur Hayes, in an interview with CoinDesk TV, cautioned that whereas the cuts might trigger a brief rally, more profound economic issues would likely follow. He contended that cutting rates amid progressing inflation may be a botch, possibly leading to more noteworthy economic challenges.

Presto Research reverberated these sentiments, expressing that whereas the market remains divided on the effect of the Fed’s choice, growth concerns continue to weigh intensely on investors. Bettors on Polymarket are progressively confident that further rate cuts are coming, with a 41% chance of a 100-basis point cut by the end of the year.

In the crypto world, Hashkey-backed Aleo saw a 14% rise after being listed on Coinbase. Moreover, other cryptocurrencies like SUI and FTM saw double-digit gains, driven by a general recuperation in AI tokens. The weakening correlation between AI tokens and Nvidia stock was highlighted as the chipmaker’s stock declined over the last five days.