Third Fed Rate Cut Lights Fire Under Bitcoin ETFs, Crypto FOMO

Core Insights - The US Federal Reserve has implemented its third consecutive rate cut in 2025, reducing the main interest rate by 25 basis points to a target range of 3.5% to 3.75%, the lowest in approximately three years [1] - Following the Fed's announcement, the stock market experienced significant gains, with the Dow Jones Industrial Average increasing by 500 points, or 5% [2] - The crypto market also saw a short-term rally, with Bitcoin surpassing $94,000 and Ethereum reaching a local high of $3,440 [2] Inflows and Market Reactions - Spot Bitcoin exchange-traded funds (ETFs) recorded a net inflow of $223.5 million, driven by BlackRock's IBIT at $192.9 million and Fidelity's FBTC at $30.6 million [3] - The announcement of the rate cut triggered a fear of missing out (FOMO) among investors, making risk assets like cryptocurrencies more appealing due to lower returns on cash and bonds [4] Market Volatility and Trends - Despite the initial positive reactions, Fed officials remain divided on inflation policies, which could lead to market confusion and increased volatility, especially as US economic growth has slowed [5] - The global crypto market cap decreased by 2.66% to $3.08 trillion, indicating some traders sold digital assets in anticipation of potential negative economic shifts [5] - Current trading values show Bitcoin at $90,200 and Ethereum at $3,200 [6]