Crypto Market Slumps Despite US Fed Rate Cut
The cryptocurrency market, including Bitcoin, continued its downward trend on Monday, despite Federal Reserve Chair Jerome Powell hinting at possible interest rate cuts later this year. At the time of publication, the overall market had declined by 4.2%.
Powell tempered expectations by warning that potential rate cuts should not be seen as guaranteed, stating, “If the economy evolves as expected, policy will shift toward a more neutral stance. But we are not on any preset course.” He emphasized that future cuts would depend on economic data.
Historically, lower interest rates have coincided with rising Bitcoin prices, as seen during the 2017 bull run when rates were between 0.75% and 1.25%. Despite Powell’s cautious optimism, major cryptocurrencies struggled—Bitcoin dropped 3.5%, Ethereum declined by 2.3%, and Solana fell 2.6%.
In addition to the broader market, the AI token sector, including tokens like NEAR, ICP, ASI, RENDER, and GRT, also saw significant declines. Even the meme coin market was hit hard, with popular coins like DOGE and SHIB losing nearly 10% in value.
Despite the current downturn, some market analysts remain hopeful. Vandell, co-founder of Black Swan Capitalist, expressed optimism, stating that potential rate cuts could drive a “massive crypto bull run” by increasing global liquidity.
While the market is still under pressure amid macroeconomic uncertainties, investors are watching closely to see how the Fed’s policy decisions will shape market dynamics in the coming months.
