TechFlow news — Joe McCann, founder and CEO of crypto hedge fund Asymmetric, said that a significant rate cut by the Federal Reserve will benefit risk assets and the cryptocurrency market, contrary to some views that see it as bearish. The Fed is expected to cut interest rates for the first time since March 2020 at 2:00 AM Beijing time on September 19, after rates reached a 24-year high of 5.5%.
McCann believes there's an equal chance of either a 25 or 50 basis point rate cut. However, the CME FedWatch tool shows a 65% probability for a 50 basis point cut and a 35% probability for a 25 basis point cut.
McCann noted that if the Fed cuts rates by only 25 basis points, the stock market could suffer a severe blow, potentially dragging down the cryptocurrency market as well. In contrast, a 50 basis point cut could be positive for risk assets like cryptocurrencies.
Saad Ahmed, Head of Asia-Pacific at cryptocurrency exchange Gemini, believes the market may have already priced in the rate cut expectations, but the actual cut could still trigger a breakout. McCann also dismissed the prevailing view that a 50 basis point cut would be negative, emphasizing that current economic conditions are more stable compared to past periods of emergency rate cuts.
