Analysis: The market has already digested the expectation of the Federal Reserve's interest rate cut, and this adjustment will have a limited impact on the short-term price of cryptocurrencies

According to CME Federal Reserve observation data, the market widely expects the Federal Reserve to announce a 25 basis point rate cut to 4.25%-4.50% range at this week's FOMC meeting, marking the second rate cut since November, with the current expectation probability as high as 93.4%.

Luis Buenaventura, head of cryptocurrency at GCash, said that because expectations for interest rate cuts have been digested by the market in advance, this policy adjustment will have limited direct impact on cryptocurrency prices. Historical data shows that when Bitcoin has risen by 50% within 60 days, there is about a two-thirds chance of achieving an additional increase of 35% in the following two months.

Neal Wen, director of global business development at Kronos Research added that in a low-interest-rate environment institutional investors tend to view crypto assets as an alternative choice for traditional investments. Min Jung from Presto Labs pointed out that market focus has shifted towards Fed Chairman Powell's policy speech content and latest economic forecast dot plot which will provide important guidance for monetary policy direction in 2025.