The Federal Reserve will make a key decision on the fate of the cryptocurrency market, speaking out about the rate cut.

With the decline in yields for bondholders, investors may reconsider riskier investments, supporting the growth of speculative assets.

However, such a reason is not so obvious, since historically, rate cuts by the Federal Reserve have led to a temporary drop in prices.

Meanwhile, Arthur Hayes, the famous founder of Bitmex, predicts that central banks will fall and switch to monetary policy management.

The Federal Reserve is ready to cut interest rates for the first time in the United States: the impact on the cryptocurrency market is about to be strongly felt

The meeting of the Federal Reserve (Fed) will have a decisive impact on the future of the cryptocurrency market.

The federal entity will have to decide whether to cut its government bonds by 25% or 50%, thus more or less drastically reducing the monetary stimulus to 

the economy.

As a result, premiums in the bond industry will almost certainly fall, but we are not sure yet how much.

The Fed injects liquidity into speculative markets, taking part of the gains from bondholders, within the framework of stabilizing and controlling inflation.

Lower interest rates are associated with the search for returns in more speculative products, such as are typical in the world of cryptocurrencies and stocks.

Therefore, in theory, investors will be reluctant to put their money into US Treasuries and choose other more profitable options.

This means an increase in the price of Bitcoin and the main US stock indices.

Obviously, these discussions must be conducted in conjunction with macro data such as national stability, monetary sovereignty, labor market, etc.

In any case, it is undeniable that the Fed's rate cut will have an impact on the future of the cryptocurrency market in the coming months.

Historical impact of the Fed's rate cut on financial markets

We want to emphasize that although historically, a slowdown in liquidity triggers an initial drop in prices, it ultimately favors the bullish scenario.

Take the golden period from April 2009 to October 2025, when interest rates remained at near zero with a target of 0.15%.

During these years, the S&P 500 rose by 150%, from $800 to $2000, without any particular graphic setbacks.

Therefore, one hopes that the US monetary framework will once again favor risky sectors such as cryptocurrencies, with fewer opportunities on the bond 

side.

At the same time, our journey towards a similar outlook must be as gentle as possible, avoiding short-term imbalances that lead to red candles.

Today could be the most important day of the year for Bitcoin and the entire cryptocurrency market.

Arthur Hayes and the End of the Central Bank Era: The Future of Cryptocurrency

As the Federal Reserve prepares to cut interest rates, Arthur Hayes expressed his concerns about the short-term impact on cryptocurrency market prices.

The Chief Investment Officer of Maelstrom and co-founder of BitMEX recently gave an interesting interview about the impact of macroeconomic events.

Hayes believes that the prices of speculative securities will collapse in an instant and inflation will dominate again, which means further government 

intervention from above.

Here are his original words at the Token2049 conference in Singapore:

"Cutting rates is a bad idea because inflation is still a problem in the United States and the government contributes more to price pressures. If you reduce 

borrowing costs, you increase inflation."

In addition, the billionaire investor believes that the Fed's rate cut will devalue the US dollar, causing the dollar to fall again against the yen.

In fact, the Bank of Japan (BOJ) is going through the opposite phase, that is, moving towards raising interest rates.

Therefore, USD/JPY could see another sharp fall after falling by about 12.5% in 3 months. In case of a sharp rate cut, we expect the FX index to fall to 135 

points. To quote Hayes again on this subject:

"The second reason is that with a rate cut, the interest rate differential between the US and Japan will narrow. This could lead to a sharp appreciation of the 

yen and trigger the unwinding of the yen carry trade".

Hayes believes that similar situations will determine the crisis of central banks and the end of the era in which they dominate the fate of the market. The Fed 

will no longer have such a strong influence on the prices of stocks and cryptocurrencies, as it has now lost control of the money supply.

Russel Napier, a market strategist at Scotland, believes that their monetary policy begins to become irrelevant.

It is likely that in a short period of time, the US interest rate will fall from the current 525-550 to close to zero, but perhaps it will not have the bullish impact 

hoped for.

In any case, Hayes believes that the crypto market has a bright future and digital assets will become the only solution to get rid of the decaying global debt 

system.