Interest Rate Dip Likely, But With Caution: Will Crypto Rebound?
The cryptocurrency market has languished since October, weighed down by macroeconomic uncertainties. Despite two Federal Reserve rate cuts—25 basis points in October and another in December—digital assets failed to rally. Investors have flocked to traditional safe havens like gold and silver, both of which have notched repeated all-time highs.
Fed minutes reveal a cautious stance: while further rate cuts are probable, officials remain wary of persistent inflation risks. Some advocate maintaining current rates indefinitely. This ambivalence leaves crypto markets in limbo, lacking the catalyst needed for a sustained rebound.
Market dynamics suggest a flight from risk. Until macroeconomic clarity emerges, cryptocurrencies may continue to underperform relative to hard assets. The Fed's next move—whether to cut or hold—could determine if digital assets regain their status as inflation hedges or remain sidelined.
