Fed Rate Cut Debate: What 25 vs. 50 bps Means for Bitcoin and Crypto Markets

Core Viewpoint - The Federal Reserve's upcoming decision on interest rate cuts, whether 25 or 50 basis points, is crucial for the Bitcoin and crypto markets, potentially reshaping the long-standing Bitcoin cycle [1] Group 1: Federal Reserve's Internal Debate - The Federal Reserve is divided on the size of the next rate cut, with Governor Chris Waller advocating for a cautious 25 basis-point cut due to economic uncertainty and softening labor markets [2] - Stephen Miran argues for a more aggressive 50 basis-point cut, citing concerns over US-China trade tensions and their impact on consumers, while anticipating a total of 75 basis points in cuts this year [3] - Minneapolis Fed President Neel Kashkari supports rate cuts as a form of "insurance" against economic downturns, highlighting the significant impact of these decisions on the US dollar and risk assets like cryptocurrencies [4] Group 2: Impact on Crypto Markets - A 25 basis-point cut may provide moderate support for crypto prices but is unlikely to trigger a significant rally, indicating a cautious Fed stance [6] - Conversely, a 50 basis-point cut could lead to a more urgent easing of monetary conditions, potentially resulting in a sharper rally in crypto markets as liquidity increases [7] - Lower interest rates generally reduce the opportunity cost of holding non-yielding assets like Bitcoin, making them more attractive to investors seeking higher returns [5]