Fed Slashes Rates by 50bps – Are We About to See a 2017-Style Crypto Boom?
A journalist and copywriter with a decade's experience across music, video games, finance and tech.
After months of tight fiscal policy, US central bank the Federal Reserve (the Fed) has slashed interest rates by 50 basis points (0.5%) in a sign of loosening purse strings that could potentially catalyze a new crypto gold rush.
In early 2022, the Federal Reserve began incrementally raising the cost of borrowing in order to stem the effects of rampant inflation.
Rates went up 11 times, until by July last year, the cost of borrowing in the US hit a two-decade high.
The Fed just cut by 50BPS.
Interestingly, on Sept 18, 2007, they also cut by 50BPS. pic.twitter.com/dX8UoEHzen
All this happened in the wake of the FTX exchange catastrophe in November 2021.
The FTX saga was a historic multi-billion dollar bankruptcy caused by the misappropriation of customer funds, the contagion for which spread to dozens of other companies, bankrupting them and ushering in an industry recession known as “crypto winter.”
Meanwhile, the rising cost of borrowing economically turned people away from crypto. In basic economic terms, if borrowing costs are high, fewer investors will venture into more speculative investments like crypto or stocks.
So, yesterday’s rate cut announcement by the Federal Reserve has positively effected on crypto. In the last 24 hours, the market grew 3.3% to capitalize a staggering $2.15 trillion.
Original cryptocurrency and trillion-cap trendsetter Bitcoin ($BTC) leads the charge today. It added 4.8% in the last 24 hours and 7.3% in the last week to trade at $62,440 as of this writing.
Its number one competitor, Ethereum ($ETH) managed to cover more ground overnight. Ethereum grew 6.2% in 24 hours but only 3.4% since last
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