Written by: Jeffrey Ding

The market is betting on an imminent interest rate cut, and crypto assets are reacting. According to data from the CME "FedWatch" tool, the probability of a 25 basis point rate cut by the FOMC this week is as high as 96%. Driven by expectations of a rate cut, both BTC and ETH have broken through key levels, reaching $114,000 and $4,400 respectively, sparking heated discussions in the market. In this round of rate cuts, will the Federal Reserve "open the floodgates" with a one-time 50 basis point cut, or will it maintain a steady approach with only a slight reduction, or even unexpectedly choose to hold steady? Different outcomes will directly shape the market's interpretation of subsequent trends.

Expectations of Rate Cuts, Liquidity Release, and Policy Shift: The "Three Driving Forces" Behind the Evolution of Crypto Markets

Looking back at the last rate cut by the Federal Reserve in September last year, the 50 basis point cut led to a strong rebound in global stock markets. Although crypto assets faced short-term pressure, they quickly stabilized and welcomed a new wave of market activity. Now, nearly a year later, the Federal Reserve is once again forced to weigh inflation against employment, moving towards a rate cut. The market is more concerned about the magnitude—if it is only 25 basis points, it may be seen as "in line with expectations," with limited benefits; however, if there is a one-time cut of 50 basis points, it could bring unexpected benefits while also deepening market concerns about the economic outlook. Regardless of the outcome, it presents potential support for BTC and ETH, with short-term volatility expected, but medium to long-term upward potential still exists.

On the liquidity front, the attractiveness of risk assets will be enhanced again. A decrease in interest rates raises the opportunity cost of dollar assets, and some funds may flow out of traditional markets into high-elasticity assets like Bitcoin and Ethereum. Similar to the valuation switching logic between U.S. stocks and A-shares, this round of easing is expected to trigger a shift of funds from overvalued markets to crypto assets. Especially with the widespread establishment of Bitcoin and Ethereum spot ETFs, the potential entry of institutional funds could lead to a concentrated release of market liquidity and structural demand in a short period. Additionally, it is worth noting that by August 2025, Ethereum's increase has reached 29%, surpassing Bitcoin's 28% increase during the same period for the first time, indicating subtle changes in fund structure and market preferences.

The shift in the regulatory environment also injects new expectations into the market. Since the new SEC Chairman Paul Atkins took office in April this year, there has been a noticeable shift in regulatory tone. Moving from a previously strict enforcement approach to encouraging innovation and building a clearer regulatory framework has released positive signals. Compared to the regulatory pressures during last year's rate cut cycle, the current policy environment is more relaxed, which is expected to allow the scale of potential fund inflows to exceed previous levels, laying the foundation for a new structural bull market for Bitcoin and Ethereum.

Overall, tomorrow's FOMC meeting is undoubtedly an important turning point for the crypto market. However, it is important to emphasize that policy benefits are merely the spark that ignites the market; only when policy, funds, and sentiment work together can the crypto market truly embark on a new round of structural bull market.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。