A widely followed crypto analyst is updating his outlook on Ethereum (ETH) and other digital assets after the Fed cut rates this week.
Crypto trader Michaël van de Poppe tells his 725,400 followers on the social media platform X that the Fed’s 50 basis point cut on Wednesday may be a bullish catalyst for crypto.
“The FOMC (Federal Open Market Committee) meeting was massive. 50 bps (basis points) rate cut. However, the dot plot assumes that another 50-75 bps of rate cuts are likely to be happening in the coming months [which is] bullish for crypto and ETH.
The most significant thing: FOMC doesn’t expect a massive impact on unemployment. This is understandable, it would be destructible if the FOMC expects unemployment to significantly rise in the coming period, leaving markets in fear.
I think they have the wrong view. I suspect that there will be a reduction in the labor markets and a huge impact on the economy, through which QE (quantitative easing) is required to keep the economy moving forward.”
The analyst believes more rate cuts may increase investor interest in Ethereum and decentralized finance (DeFi) crypto projects. He suggests ETH may start to break out against Bitcoin (ETH/BTC).
“The likelihood of more rate cuts will be substantial, through which ETH and DeFi become way more attractive. I think this would mean a higher inflow in the ETF (exchange-traded fund) plus more interest in yield, through which ETH/BTC should be running upwards. Let’s see.”
The analyst also believes that a bullish trend has already begun for Bitcoin, ETH and decentralized finance (DeFi) applications.
Bitcoin is trading for $62,885 at time of writing, up nearly 4% in the last 224 hours. Meanwhile, ETH/BTC is trading for 0.03923 BTC ($2,466) at time of writing, up 1.63% on the day.
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