Crypto market awaits Fed’s rate cut decision

ANKARA

The cryptocurrency market is awaiting a possible interest rate cut by the US Federal Reserve on Wednesday during the bank’s Federal Open Market Committee (FOMC) meeting.

With US labor data deteriorating and inflation falling below 3%, the Fed is expected to deliver its first rate cut of the year.

Markets widely anticipate a 25-basis-point reduction, followed by two more cuts of the same size at the remaining meetings this year.

Mustafa Batuhan Tufaner, an associate professor of economics at Istanbul Beykent University, told Anadolu that the Fed is facing “a kind of dilemma” with rate cuts.

He said the Fed has been cautious due to tariff-related uncertainties but is now more likely to act given rising jobless claims. Pressure from US President Donald Trump on Fed Chair Jerome Powell to cut rates is another factor.

While a rate cut would directly affect most US markets, global cryptocurrency markets are also watching the Fed’s move closely.

“Cryptocurrencies will be positively influenced by a rate cut, but geopolitical developments will also influence this process,” said Tufaner.

Bitcoin is trading around $115,000 ahead of the meeting, while Ethereum is around $4,500.

“The start of the Fed’s easing cycle has been anticipated for some time by alternative investment investors. However, part of this expectation has already been priced in. Whether the rate decision is a one-off or part of a broader rate cut cycle will be key for cryptocurrencies,” he added.

Tufaner noted that macroeconomic factors like interest rate decisions will influence the short-term trajectory of cryptocurrencies, while upcoming regulations on stablecoins and tokenized securities will be decisive for the market’s medium-term future.

He also underlined that Türkiye is preparing to transition to digital currencies, with phase two studies already underway.

“As regulations and digital currency use become more widespread, the inflow of capital into crypto assets will accelerate,” he predicted.