The negative impact of Fed rate cuts on crypto markets cannot be ignored

On July 12, CoinDesk cited a report by Markus Thielen, founder of 10x Research, who said that if the Federal Reserve cuts interest rates in September 2024 simply because of inflation concerns, this could be a short-term positive for bitcoin. However, if economic growth concerns lead to a rate cut, either in September or later, Bitcoin could face significant selling pressure. In addition, strategists at the Wells Fargo Investment Institute said the arrival of a Fed rate-cutting cycle tends to coincide with a sharp decline in the stock market. Since 1974, the stock market has fallen an average of about 20 percent in the 250 days following the Fed's first rate cut. This means cryptocurrency traders should be wary of signs of weakness in the U.S. economy.