Huobi Growth Academy | Cryptocurrency Market Macro Research Report: Latest Outlook for the Crypto Market Under Fed Rate Cut Expectations
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Huobi Growth Academy | Cryptocurrency Market Macro Research Report: Latest Outlook for the Crypto Market Under Fed Rate Cut Expectations
The Federal Reserve rate cut in September 2025 is not a "single switch" for bull or bear markets, but rather a trigger point for the market under complex conditions.
Navigating Web3 tides with focused insightsAbstract:
This research report, based on a review of the 2019/2020/2024 rate cut cycles and combined with the latest employment and inflation data, price signals from the dollar and gold, as well as high-frequency indicators such as ETF flows and stablecoin supply, proposes the core thesis that "rate cuts = condition-triggered rather than single catalyst." The market has nearly fully priced in a 25bp cut in September, with Bitcoin trading within the key range of $110,700–114,000 and volatility at low levels. Slowing ETF net inflows and weakening marginal corporate Bitcoin purchases make price movements increasingly dependent on pre-meeting price paths and post-announcement shifts in marginal liquidity. If prices remain flat or pull back moderately before the Fed meeting, the rate cut is more likely to act as a "stabilizer," triggering an unexpected rebound. Conversely, if prices surge ahead of the meeting, the risk of a "sell-the-fact" reaction and short-term pullback rises. Medium-term price heights will depend on two "quantitative gates"—sustained ETF absorption and the return of corporate treasury/re-financing purchases. Institutionalization of DAT and stablecoin expansion offer incremental liquidity, while inflation rebounds, dollar stabilization, regulatory uncertainty, and geopolitical risks remain key constraints. Strategically, we recommend "tactical light positioning during policy week, strategic alignment with Q4 liquidity," closely monitoring inflection points in ETF flows and stablecoin supply, focusing on BTC/ETH anchors while selectively targeting structural opportunities in XRP, SOL, and DAT-related assets, using options/basis hedging to manage drawdowns.
I. Macro Background Overview
The current global macro environment stands at a delicate and critical turning point. With U.S. economic data persistently weakening, market consensus is coalescing around the Federal Reserve initiating this round of rate cuts on September 17. Data from CME FedWatch and decentralized prediction markets like Polymarket show the probability of a 25bp cut at this meeting has surged into the 88%–99% range—almost a foregone conclusion. On the evening of September 10, Jinshi News reported that U.S. August PPI YoY came in at 2.6%, below expectations of 3.3% and July’s 3.1%, significantly lower than forecast. After the surprise drop in PPI eased concerns over inflation hindering monetary easing, traders bet Wednesday that the Fed may launch a series of rate cuts extending through year-end. According to futures contracts tied to the Fed’s policy rate, markets expect a 25bp cut at next week’s meeting followed by further equivalent cuts through the year. Meanwhile, some Wall Street institutions and international investment banks, such as Bank of America and Standard Chartered, even project room for a second rate cut within the year. While a one-time 50bp aggressive move remains a low-probability event, it is no longer entirely dismissed amid unexpectedly rapid cooling in the labor market. This shift in policy expectation was directly triggered by the recent significant deterioration in the U.S. job market. August nonfarm payrolls rose by only 22,000 jobs, far below the previously expected 160,000–180,000 range, while the unemployment rate unexpectedly climbed to 4.3%, the highest since 2021. Even more impactful, the U.S. Department of Labor’s benchmark revision to prior-year employment data resulted in a downward adjustment of over 900,000 jobs. This implies the narrative of robust employment relied upon in recent months was severely overstated, revealing a more fragile underlying labor market. Historically, revisions of this magnitude typically occur only at the onset of recessions or after major shocks, thus rapidly intensifying market expectations for the Fed to accelerate its pivot toward easing.
However, slower employment growth has not brought a synchronized sharp decline in inflation, instead creating a complex situation of "slowing growth + sticky inflation." Latest data shows U.S. CPI still hovering around 2.9%, with core PCE fluctuating between 2.9% and 3.1%, significantly above the Fed’s 2% long-term target. This inflation stickiness means policymakers still face pressure when loosening monetary policy—they must cushion labor market weakness without excessively stimulating prices upward again. This dilemma has widened market divergence over the Fed’s future policy path: dovish voices emphasize that labor market deterioration already poses systemic risk, warranting faster and deeper cuts; while hawkish factions argue current price levels cannot be ignored, and an early pivot could undermine long-term inflation anchoring. Every step the Fed takes will be magnified in financial markets. Against this backdrop, financial market price signals also reflect rapidly shifting expectations. The dollar index continues to weaken, falling to its lowest level in nearly a year, indicating investors are reevaluating the appeal of U.S. monetary assets. In contrast, safe-haven and liquidity-sensitive assets are performing strongly. Gold has climbed steadily since summer, recently breaking the $3,600 per ounce mark and setting consecutive new highs, becoming the most direct beneficiary of looser liquidity expectations. In the bond market, long-end yields have clearly retreated after early-year volatility, with the yield curve remaining deeply inverted, reinforcing concerns about future recession risks. Meanwhile, equities show relative divergence: tech and growth sectors maintain resilience due to rate-cut expectations, while traditional cyclical sectors lag under fundamental pressure.
This macro landscape is now interpreted not just as a domestic U.S. monetary policy turning point, but as the beginning of a new global liquidity cycle. Central banks including the ECB, BoJ, and emerging market counterparts are closely watching the Fed’s moves, with some markets even releasing preemptive easing signals to gain advantage in the reallocation of global capital. As the dollar weakens, some emerging market currencies gain breathing room, and commodity prices remain firm under liquidity support. These spillover effects mean the September FOMC meeting is not merely a U.S. financial event, but a pivotal moment in global risk asset pricing. For the crypto market, this macro context is especially important. Over the past decade, cryptocurrencies like Bitcoin have gradually shifted from fringe assets to mainstream portfolio components, with their price volatility increasingly correlated to macro liquidity conditions. Historical patterns show Bitcoin often rallies ahead of monetary easing ("expectation-driven rise"), yet sometimes experiences short-term "sell-the-fact" pullbacks after policy implementation due to deteriorating economic realities. Today, amid sharply weakening employment, persistent inflation, a weakening dollar, and gold repeatedly hitting new highs, Bitcoin’s pricing logic sits at a critical juncture where policy expectations clash with economic reality. Traders, institutional investors, and retail participants alike are closely watching the Fed’s September 17 meeting—a potential decisive turning point for crypto market trends over the coming months or even the entire year.
II. Current Crypto Market Overview
Bitcoin’s price has recently stabilized near $113,000, with a weekly gain of approximately 2.4%, generally within a relatively calm consolidation range. Notably, volatility has dropped to multi-month lows, suggesting the market is entering a phase of observation and momentum accumulation. Analysts highlight a key technical range of $110,700–114,000: a sustained breakout above $114,000 could open space for a new rally wave, potentially shifting market sentiment toward bets on "liquidity return"; conversely, a break below $110,700 would bring initial support at $107,000 into focus, with a breach potentially triggering deeper correction toward $100,000. This resistance-above, support-below structure reflects investor caution ahead of the upcoming Fed policy window, with the market temporarily controlling exposure before key news releases, dampening short-term volatility. Compared to Bitcoin’s sideways movement, Ethereum has shown relative weakness recently, accompanied by continuous ETF outflows and tightening funding conditions. Some market participants believe Ethereum’s ecosystem narrative is currently lackluster, with Layer2 scaling and restaking sectors cooling down after mid-year hype, leaving institutions lacking motivation for new allocations. However, ETH’s on-chain activity remains resilient, with DeFi utilization and staking scale holding high, partially buffering negative impacts from fund outflows. In contrast, assets like XRP and Solana have seen temporary rebounds driven by rate-cut expectations. XRP, in particular, jumped about 4% in a day following market attention on ETF-related products, showing some investors are shifting risk appetite to secondary blue-chips during Bitcoin’s consolidation. Solana continues to benefit from ecosystem innovation and institutional interest, especially news that its Digital Asset Treasury (DAT) concept gained Nasdaq access, making it a pioneering case of on-chain capitalization and providing SOL with independent catalysts. ETF flows remain one of the market’s core structural drivers. Both Bitcoin and Ethereum ETFs have shown net outflows over recent weeks, reflecting institutional caution, though new product approvals and pending decisions remain focal points. For example, anticipation around XRP ETFs and new Bitcoin ETF approvals is still viewed as a potential spark for renewed inflows. Some research firms estimate that if the Fed cumulatively cuts rates by 75–100bp in 2025, over $6 billion in incremental capital could flow into crypto ETFs, forming potential structural buying pressure. This mirrors 2024, when combined ETF inflows and corporate Bitcoin purchases drove Bitcoin’s strength post-rate cuts. The difference in 2025 is that ETF inflow momentum has clearly slowed, and the market awaits new triggers.
Beyond traditional Bitcoin, Ethereum, and ETF narratives, emerging themes are reshaping market structure. First is the rapid rise of Digital Asset Treasuries (DAT), a hybrid model combining public equity financing with on-chain reserves, now expanding from Bitcoin and Ethereum cases into the Solana ecosystem. Recent approval of SOL Strategies’ Nasdaq listing signals accelerating integration between traditional capital markets and crypto reserve mechanisms. DATs often generate positive feedback loops during bull markets via asset appreciation and capital premiums, but amplify risks in bear markets through redemptions and sell-offs. Their pro-cyclical nature makes them a highly watched innovation. Some analysts dub DATs “the next ETF,” expecting them to become institutional fixtures in capital markets over the coming years. Meanwhile, meme coins and high-risk altcoin contracts remain active, serving as retail sentiment barometers. Amid lack of directional momentum in major coins, substantial capital flows into volatile meme projects like Dogecoin, Bonk, and PEPE, which maintain high social media and derivatives market activity. Cyclical meme coin rallies typically signal rising risk appetite, but also carry elevated liquidation risks and short-term volatility. This high-risk preference contrasts sharply with institutional investors’ conservative allocations, highlighting continued fragmentation within the crypto market.
In sum, the crypto market currently sits at a complex equilibrium: Bitcoin consolidates in a key range, awaiting policy cues to determine direction; Ethereum faces near-term funding pressure but retains long-term ecosystem resilience; secondary blue-chips and emerging narratives offer localized highlights but lack capacity to drive broad market momentum; ETF flows and stablecoin expansion form the foundational support. Combined with the nascent DAT model and high-risk meme market dynamics, the current market presents a multi-layered landscape. At this critical juncture of impending macro policy shifts, market sentiment lies between caution and试探, with this low-volatility wait potentially setting the stage for significant moves ahead.
III. Review and Analysis of U.S. Rate Cut History and Current Status
Looking back at the last three "rate cut–crypto market" interactions reveals how the same macro signal produces vastly different price paths under varying fundamentals and funding structures. 2019 was a classic case of "expectations first, sell-the-fact": before fundamentals deteriorated enough to justify easing, Bitcoin rallied early on recovering risk appetite and repricing. The Fed cut rates three times—in July, September, and October—with marginal monetary easing and delayed "soft landing" bets driving BTC’s rebound in the first half, briefly touching above $13,000 in June. However, once policy materialized, deteriorating economic reality and falling global risk appetite dominated pricing, causing Bitcoin to retreat from highs and close the year near $7,000. The market ultimately corrected earlier optimistic views on liquidity and growth via a "realization–repricing" process. Thus, in 2019, it wasn’t the rate cuts themselves that suppressed prices, but the dominant narrative that "rate cuts = confirmation of slowing growth," resulting in a rise-then-fall sequence.
2020 presented a completely different "abnormal case." A pandemic-induced liquidity shock prompted the Fed to emergency-cut rates twice in March (−50bp on March 3, −100bp on March 15 to zero), alongside unlimited QE and central bank swap lines to stabilize systemic risk. Around the peak of the crisis—"Black Thursday" (March 12)—Bitcoin sold off alongside other risk assets due to forced deleveraging, plunging sharply in a day, before quickly rebounding on the dual fiscal-monetary stimulus forming a "policy bottom." Because this episode was triggered by an exogenous public health crisis and liquidity crunch—not a typical late-cycle slowdown—it lacks high-frequency comparability to 2025: the 2020 "crash then rebound" reflected technical contraction from dollar shortage and margin chain stress, not a linear response to rate cuts themselves.
In 2024, history took another turn. Macroeconomically, the Fed launched its easing cycle in September with a direct 50bp "opening move," with dot plots signaling further cuts. Politically, the U.S. election pushed "crypto/digital asset regulation and national strategy" to center stage. In markets, pent-up passive and active demand from spot Bitcoin ETFs, accumulated under regulatory clarity, exploded into record daily net inflows after election results were clear. This three-factor convergence powerfully offset the traditional "sell-the-fact" pattern: prices didn’t follow 2019’s "reality-check pullback," but instead strengthened gradually under triple support—policy anchoring, favorable narratives, and instrumental buying (ETFs)—completing a three-stage evolution from "narrative → funding uptake → price confirmation." In short, 2024 demonstrated that when structural incremental capital (ETFs) coincides with strong narratives (policy friendliness/political cycle), the signal effect of rate cuts becomes significantly amplified and sustained, weakening the traditional "rate cuts = slowing growth" concern channel.
Based on these three episodes, the September 2025 rate decision resembles a "conditional trigger point" rather than a unidirectional catalyst. First, in terms of timing, Bitcoin has entered a prolonged consolidation after retreating from mid-year highs, with implied volatility low and futures positioning neutral. ETF net inflows have notably slowed, with individual months nearing record-level outflows—meaning the 2024-style "policy + narrative + passive funds" resonance hasn’t re-emerged. Second, structurally, divergences in Ethereum ETF and major chain fund flows suggest allocation desks are reassessing the balance between "beta vs. structural opportunities." Third, in macro anchoring, market consensus on a 25bp September cut is extremely high, shifting marginal variables to "forward guidance and subsequent pace post-announcement," which now matter more than "whether to cut" in shaping duration, real rates, and liquidity expectations. These three factors together indicate the September meeting is more likely a "moment for position and sentiment recalibration," with price impact contingent on pre-existing paths.
Accordingly, we outline two potential evolutionary paths for September 2025. If prices rise organically before the meeting, momentum indicators strengthen and approach the upper key zone, historical odds increase for a replay of "expectation trade → fact realization": post-cut, short-term longs may take profits while CTA/quantitative momentum reversal strategies compound, triggering a 3%–8% quick pullback, with medium-term liquidity expectations and marginal funds later determining secondary direction. The core here is "price leads, funds follow," turning "easing" from bullish catalyst into profit-taking signal at the moment of delivery. Conversely, if prices remain flat or mildly retreat pre-meeting, leverage and speculative net longs are passively reduced, placing the market in a "low-position, low-volatility, low-expectation" tri-low state. Then, a 25bp cut paired with dovish forward guidance could act as a "stabilizer" or even a "pleasant surprise," sparking an unexpected rebound. A chain reaction would unfold: narrowing ETF outflows, recovery in stablecoin issuance, improved derivatives basis, and restored spot premium—gradually building a firmer medium-term platform through "bottoming-out → gradual lift."
Thus, through the three-step framework of "historical review → current assessment → scenario analysis," we derive three execution-level conclusions: First, prioritize "path dependency" over "the event itself." Whether prices rise or consolidate pre-meeting determines how identical news translates into divergent price reactions. Second, tracking marginal inflection points in "quantitative gates" matters more than judging "dovish vs. hawkish": ETF flows and corporate buy-refinance activities are observable funding variables whose explanatory power for price trends often exceeds macro narratives. Third, respect "term stratification," splitting trading into parallel tracks: "tactical trades during policy week" and "strategic positioning on Q4 liquidity trends." The former relies on position control and risk management, the latter on forward-looking judgment of funding and policy rhythm. History doesn’t repeat, but it rhymes: 2019’s "rise then fall," 2020’s "crash then V," and 2024’s "continued strength post-cut" collectively form the "conditional trigger" context for September 2025—the key isn’t the "hammer falling," but what positions and funding gates lie beneath each end of the anvil when it does.
Under the current backdrop of near-unanimous market expectations for a September Fed rate cut, potential crypto market paths can be categorized into "positive–negative–uncertain" scenarios. First, the positive path: the market has already almost fully priced in a 25bp cut, meaning the policy implementation itself may not be decisive. But if marginal variables shift positively—such as ETF flows resuming net inflows, institutions adding exposure after a dip, or new corporate Bitcoin purchases emerging—mainstream assets like Bitcoin and Ethereum could see a second upward leg. Research firm AInvest notes that a flattening yield curve implies lower risk-free rates, supporting valuations of risk assets, especially Bitcoin where "long-term holding" dominates. Under this scenario, Bitcoin could regain momentum, continuing the 2024-style "policy bottom + structural funding resonance." CryptoSlate estimates that cumulative 75–100bp rate cuts in 2025 could release over $6 billion in incremental ETF demand into Bitcoin. Some prominent analysts are optimistic: Fundstrat’s Tom Lee stated outright that if rate cuts coincide with strong ETF inflows, Bitcoin could target $200,000 by year-end, while Ethereum could reach $7,000 on chain narratives and liquidity synergy. While these forecasts are aggressive, they highlight the amplifying potential of policy-funding resonance, especially given the current low volatility and light positioning—once new capital enters, price elasticity could be significantly enhanced.
In summary, the impact of the September 2025 rate cut on crypto markets is not unidirectional, but depends on the interplay of price trajectory, capital flows, and macro variables. If the market remains stable pre-meeting with ETF inflows recovering, an unexpected rebound could push Bitcoin and Ethereum to new interim highs. If prices surge beforehand, "sell-the-fact" risk rises sharply, concentrating short-term volatility. In the medium to long term, the true determinant of price height remains ETFs’ sustained absorptive capacity, revival of corporate Bitcoin demand, and whether macro conditions allow continued loose liquidity. Under these constraints, investors must recognize both upside potential and downside risks, strategically balancing "tactical maneuvering during policy week" with "strategic positioning on Q4 liquidity trends."
IV. Opportunities and Challenges
Looking ahead to Q4 2025 and beyond, crypto market trajectories will hinge on three factors: macro liquidity environment, structural capital forces, and internal industry innovation narratives. After the September rate cut, market focus will gradually shift to the continuity of future policy paths and whether capital will return to risk assets. In this context, Bitcoin and Ethereum, as pricing anchors, will play a decisive role. Around this core, the market faces both opportunities and challenges. From an opportunity perspective, first is the return of macro liquidity and asset allocation demand. As the U.S. economy enters a slowdown phase and the bond yield curve declines, investor returns on risk-free assets diminish, lifting risk premia across asset classes. This creates valuation expansion potential for Bitcoin as a "store of value" and "liquidity-sensitive asset." If the Fed further cuts rates by year-end or into early 2026, global capital reallocation could channel more institutional money into crypto. Some investment banks and research firms predict that under a 75–100bp easing path, annualized incremental inflows into Bitcoin ETFs could reach $60–80 billion, forming solid medium-to-long-term buying support. For Ethereum, its role as crypto financial infrastructure is clearer; if regulation continues to favor spot ETH ETFs, capital could push its price into a new valuation range.
Second is the continuation of corporate Bitcoin demand and balance sheet strategies. Since 2020, cases like MicroStrategy and Tesla have proven the feasibility of "corporate treasury allocation to crypto assets," and since 2024, this model has become institutionalized. With richer corporate financing tools—convertible bonds, ATM financing mechanisms—the logic of raising capital in capital markets and directly allocating to BTC has been validated. If macro rates fall in 2025, lowering corporate financing costs, it may incentivize a new "fundraise–buy-Bitcoin–stock repricing" flywheel. This structural buying has been a new pillar of the crypto market in recent years; its sustainability will determine BTC’s price floor stability.
The third opportunity lies in the convergence of industrial innovation and capital markets. The Digital Asset Treasury (DAT) model has taken shape during 2024–2025, essentially combining crypto reserves with traditional capital market financing tools to create a "third category of institutional buyers" beyond ETFs and corporate purchases. SOL Strategies' Nasdaq listing marks a breakthrough in integrating traditional capital markets with on-chain assets. Once DAT products scale up, they will bring external capital into specific chains and ecosystems, offering alpha opportunities beyond standard market beta. Also noteworthy is the expansion of the stablecoin ecosystem. Tether, USDC, and regional stablecoin projects are increasingly acting as "shadow dollars" by holding Treasuries and cash management instruments. Their large-scale expansion provides additional liquidity buffers for the crypto market.
At the same time, challenges cannot be overlooked. The first challenge comes from the cyclical risk of "selling the fact." Even if the September rate cut triggers a short-term rebound, the reality remains that easing often signals weak growth and declining risk appetite. If the U.S. labor market continues to deteriorate and corporate earnings outlooks are revised downward, ETF and institutional buying may stall, and crypto assets could still replay 2019’s "highs-to-lows" trajectory after a short rally. This requires investors to maintain flexibility in positioning and liquidity even if bullish in Q4, avoiding one-sided bets. The second challenge stems from uncertainty in inflation and dollar paths. If CPI rebounds in the coming months, with core PCE lingering around 3%, the Fed may have to slow its cutting pace. Should the dollar stabilize or rebound temporarily, Bitcoin’s logic as a "hedge against dollar depreciation" would weaken. Additionally, global macro risks—such as geopolitical tensions or energy price swings—could cause unexpected inflation rebounds, further constraining room for liquidity easing. This misalignment between macro and market conditions could become a source of volatility in Q4. The third challenge is regulatory and policy uncertainty. The U.S. election process and candidates’ attitudes toward crypto will directly affect regulatory tone. Delays in approvals, stalled ETF product launches, or new policy restrictions on the crypto industry could swiftly turn sentiment cautious. Moreover, regulatory developments in Europe and Asia are equally important. Policy directions in Singapore, Hong Kong, and the EU regarding crypto custody, trading, and compliance could influence regional capital flows. Tighter regulations would constrain institutional inflows and reduce market resilience.
Overall, the crypto market after September 2025 stands at a complex crossroads. On one hand, loose liquidity, corporate Bitcoin purchases, and new capital market products provide long-term structural upside. On the other, economic realities, inflation, and regulatory uncertainties pose periodic challenges. For investors, the optimal strategy in the next phase isn’t betting on a single path, but maintaining dynamic balance between opportunities and risks: leveraging macro easing and structural capital for long-term positioning, while using risk hedging and position management to guard against short-term volatility. In other words, Q4 2025 won’t be a simple bull or bear market, but a complex landscape of "coexisting opportunities and risks, intertwined volatility and trends." Only by maintaining flexibility and discipline can investors capture genuine excess returns in this phase.
V. Conclusion
Reviewing the three rate-cut cycles of 2019, 2020, and 2024, Bitcoin has displayed vastly different price trajectories under differing macro environments and funding structures. This report draws three core conclusions. First, the Fed’s rate cut is almost fully priced in; the 25bp cut itself won’t alter trends. What truly determines direction is the pre-meeting price path and post-cut marginal capital flows. If Bitcoin remains flat or pulls back moderately before the meeting, releasing positioning pressure, the rate cut could act as a stabilizer or even spark an unexpected rebound. If prices surge beforehand, the likelihood of a "sell-the-fact" reaction rises significantly, potentially leading to short-term pullbacks. Second, ETFs and corporate Bitcoin demand are the quantitative gates determining whether medium-term momentum sustains. If ETF net inflows resume positive growth and the corporate refinancing-buying flywheel restarts, even with intraday volatility, Q4 could still follow a "bottoming–lifting–breakout" path. Third, macro and policy uncertainties remain potential risks.
In sum, the September 2025 Fed rate cut is not a "single switch for bull or bear market," but a trigger point under complex conditions. For investors, the key lies in dynamically adjusting cognitive frameworks: neither treating rate cuts as automatic bullish signals nor excessively fearing "sell-the-fact" risks, but maintaining balance between opportunity and challenge. Leverage macro-policy and structural capital synergies for long-term positioning, while managing short-term risks via flexible sizing and hedging tools. Only this way can investors protect downside while capturing potential excess returns throughout the volatile cycles of Q4 2025.
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