{"id":26606,"date":"2023-12-14T06:31:27","date_gmt":"2023-12-14T06:31:27","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/fed-pause-is-a-green-light-for-investors-heres-what-it-means-for-crypto\/"},"modified":"2023-12-14T06:31:30","modified_gmt":"2023-12-14T06:31:30","slug":"fed-pause-is-a-green-light-for-investors-heres-what-it-means-for-crypto","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/fed-pause-is-a-green-light-for-investors-heres-what-it-means-for-crypto\/","title":{"rendered":"Fed pause is a \u2018green light\u2019 for investors; here\u2019s what it means for crypto"},"content":{"rendered":"
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A decision from the United States Fed to pause and possibly lower interest rates next year will likely serve as a \u201cpositive boost\u201d for cryptocurrencies and crypto stocks.<\/p>\n

In a Dec. 13 interview with Bloomberg, Blackrock fund manager Jeffrey Rosenberg described the Fed\u2019s rate pause \u2014 and its hint at rate cuts next year \u2014 as a \u201cgreen light\u201d for investors, with the S&P 500 rallying 1.37% on the decision. <\/p>\n

\u201cThis bullish sentiment can go on for a while, at least until we get a new round of economic data, and until then the message is clear: the fed is more than willing to see an easing in financial conditions.\u201d <\/p><\/blockquote>\n

Crypto stocks have witnessed significant gains on the back of the announcement too, with shares of Coinbase (COIN) and MicroStrategy (MSTR) respectively spiking 7.8% and 5% on the day, while Bitcoin miner Marathon Digital (MARA) jumped 12.6%. <\/p>\n

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Perfect storm \u26c8\ufe0f: #Bitcoin<\/a> Halving;#Bitcoin<\/a> Spot ETFs;
Fed stops raising rates while signaling 3 cuts in 2024;
Good Court outcomes in @Ripple<\/a> \/ @Grayscale<\/a> cases;
Binance settlement;
Election year = rates cuts, coupled with \ufe0f go brrrrr and increased liquidity. <\/p>\n

= https:\/\/t.co\/1grOT1fBig<\/p>\n

\u2014 John E Deaton (@JohnEDeaton1) December 13, 2023<\/a><\/p><\/blockquote>\n

Henrik Andersson, chief investment officer at investment fund Apollo Crypto told Cointelegraph that he expects today\u2019s pause and the expectation of lowered interest rates in the coming year to be a \u201cpositive boost\u201d for cryptocurrencies and crypto-related stocks, adding:<\/p>\n

\u201cIf we see the likes of BlackRock and Fidelity launch Bitcoin ETFs we can expect a lot of other traditional financial institutions to enter the crypto markets as well.”<\/p><\/blockquote>\n

Notably, blockchain equities recently experienced their largest weekly inflows on record, with a staggering $126 million flowing into crypto-related stocks, according to a Dec. 11 report from CoinShares. <\/p>\n

CoinShares’ head of research, James Butterfill, also found that digital asset investment products experienced their 11th straight week of inflows, posting another weekly gain of $43 million. <\/p>\n

Crypto products notched an 11th straight week of inflows. Source: CoinShares<\/em><\/figcaption><\/figure>\n

Tina Teng, market analyst at CMC Markets, told Cointelegraph the Fed\u2019s rate pause would undoubtedly increase market enthusiasm for crypto products. <\/p>\n

\u201cThe pivot boosted broad risk-on sentiment and improved expectations for future liquidity conditions, thereby buoying crypto stocks in the same manner.\u201d<\/p><\/blockquote>\n

Related: <\/em><\/strong>Bitcoin to surge to $80K as stablecoins overtake Visa in 2024: Bitwise<\/em><\/strong><\/p>\n

Teng said investors can expect to see similar bullish trends not seen since previous rate-cute cycles, something that will be amplified by institutional interest in pending spot Bitcoin ETFs, which are currently slated for a decision in early January. <\/p>\n

However, Andersson added that a side effect of lower interest rates could be the cooling of the real-world asset (RWA) tokenization narrative, with expected increases in DeFi yields becoming more attractive to investors in a low-rate environment. <\/p>\n

\u201cA lot of the interest so far has been in tokenizing treasuries. We now see an environment where we can generate in excess of 10% yield in DeFi while traditional yields are heading the opposite direction,\u201d he added. <\/p>\n

Like many market commentators, Teng and Andersson both looked to the upcoming Bitcoin halving \u2014 currently slated for April next year \u2014 as a major catalyst for overall crypto market growth in 2024. <\/p>\n

Magazine: <\/em><\/strong>Breaking into Liberland \u2014 Dodging guards with inner-tubes, decoys and diplomat<\/em><\/strong><\/p>\n<\/div>\n