Fitch Reveals When the FED Will Start Interest Rate Cuts! How Will Bitcoin and Cryptocurrencies Be Affected?

In September 2024, the FED, which began a rate cut cycle with a 50 basis point rebate, has kept interest rates steady since January.

While Bitcoin and cryptocurrency investors are waiting for the FED to start cutting interest rates to revive the market, US President Donald Trump is also pressuring the FED for a rate cut.

However, FED Chairman Jerome Powell stated in his remarks that they are focused on a lasting decrease in inflation and their target of 2%, indicating that they will act based on upcoming economic data regarding interest rate rebates.

While the FED continues its cautious approach, Fitch Ratings, a globally recognized credit rating agency, has predicted when the FED will begin its interest rate cuts.

According to a report by Reuters, Fitch stated that it is likely the FED will cut interest rates in the 4th quarter of 2025.

According to Fitch, the FED is expected to postpone lowering interest rates until the fourth quarter of 2025, citing ongoing economic conditions and inflation trends as justification.

How Do FED’s Interest Rate Cuts Affect Cryptocurrencies?

The FED’s interest rate cuts are expected to positively affect Bitcoin and altcoins. This is because lower interest rates generally make borrowing cheaper, which can lead to increased liquidity in the financial system. Some of this liquidity may flow into higher-risk assets such as cryptocurrencies.

From another perspective, low interest rates could weaken the dollar. A weaker dollar may make risky assets like Bitcoin more attractive to investors and potentially increase prices.

Finally, low interest rates generally create a greater willingness to take risks in the markets. Investors become more willing to take risks, and cryptocurrencies can benefit from this situation and experience an increase.