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Following several months of stringent fiscal measures, the US central bank, the Federal Reserve (the Fed), has reduced interest rates by 50 basis points (0.5%), indicating a potential easing of financial conditions that could spark a new surge in cryptocurrency investments.
In early 2022, the Federal Reserve commenced a series of incremental increases in borrowing costs to mitigate the impact of soaring inflation.
Rates were raised 11 times, culminating in July of the previous year when borrowing costs in the US reached a two-decade peak.
The Fed just cut by 50BPS.
Interestingly, on Sept 18, 2007, they also cut by 50BPS. pic.twitter.com/dX8UoEHzen— unusual_whales (@unusual_whales) September 18, 2024
The Effect of Monetary Policy on Cryptocurrency Markets
This development occurred in the aftermath of the FTX exchange collapse in November 2021.
The FTX incident represented a significant multi-billion dollar bankruptcy resulting from the misuse of customer funds, which subsequently affected numerous other firms, leading to their insolvency and initiating an industry downturn referred to as “crypto winter.”
Concurrently, the escalating borrowing costs dissuaded individuals from engaging with cryptocurrencies. In fundamental economic terms, high borrowing costs typically result in fewer investors pursuing more speculative assets like cryptocurrencies or stocks.
Consequently, the Federal Reserve’s announcement of a rate cut has had a favorable impact on the cryptocurrency market. Over the past 24 hours, the market has increased by 3.3%, reaching an impressive $2.15 trillion.
The original cryptocurrency and trillion-cap leader Bitcoin ($BTC) is at the forefront today. It has risen by 4.8% in the last 24 hours and 7.3% over the past week, trading at $62,440 at the time of this report.
Its primary rival, Ethereum ($ETH), made even greater strides overnight. Ethereum increased by 6.2% in 24 hours but only 3.4% since last Thursday, currently trading at $2,431.
Among the ten largest cryptocurrencies, Solana ($SOL) recorded the highest intraday gains.
Solana surged by 8.2% to $139. Meanwhile, Ripple’s payment-focused XRP ($XRP) saw the most significant growth over the week. In the past seven days, XRP has gained 8.3% and is currently priced at $0.5832.
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Do Federal Reserve Rate Cuts Indicate the Return of Alt-Season?
With the Federal Reserve reducing rates, investors are likely to transition into more risk-oriented positions for enhanced returns.
For those seeking alternatives to relatively “safe” investments like Bitcoin and Ethereum, the presale market presents opportunities to invest in crypto projects at their inception.
The $44 billion meme coin sector, which has grown by 6.4% in the last 24 hours, is one area that shows significant potential.
Although meme coins may have originated as a joke, they are quickly establishing longevity by providing new value and utility to their holders.
A new initiative, named Memebet, has introduced the first online casino where players can utilize meme coins.
The presale commenced this week, and the project’s native $MEMEBET token attracted over $200,000 in investments within just two days.
With online gambling projected to expand from a $100 billion industry in 2024 to $130 billion over the next five years, it is unlikely that the Federal Reserve’s policies will hinder the growth of platforms like Memebet.
$MEMEBET tokens provide a variety of benefits for players, including airdrop rewards, exclusive VIP bonuses, and access to the upcoming Memebet Casino Lootboxes, which feature real-world prizes and casino bonuses.
The project has recently initiated a 400 million $MEMEBET airdrop.
To participate, simply purchase some tokens, await the launch of the casino (before the presale concludes), and begin gaming and betting to earn rewards.
Stay informed about the latest updates and developments regarding Memebet on X and Telegram.
Visit Memebet Casino
The post Fed Slashes Rates by 50bps – Are We About to See a 2017-Style Crypto Boom? appeared first on Cryptonews.
