Crypto market stays in the green after 25bps Fed cut

Bitcoin, Crypto Market Maintain Momentum After Federal Reserve’s First Rate Cut Under Trump’s Victory

The Bitcoin and broader cryptocurrency market continued their positive momentum following the Federal Reserve’s rate cut on November 7—its first since Donald Trump’s election win.

The Federal Reserve announced a 25 basis point reduction in U.S. funding rates during its Federal Open Market Committee (FOMC) meeting this month, following up on the 50bps cut initiated in September. Bitcoin (BTC) remained firmly above $76,000, and the overall cryptocurrency market stayed in the green, continuing its recent upward trend.

Following the announcement, Wall Street saw a boost, and the CBOE Volatility Index (VIX) dipped, signaling a calmer market. However, cryptocurrency prices saw little immediate change post-meeting, with some social media commentators suggesting that future FOMC decisions may have a diminished impact on digital asset prices.

The Fed’s Position on Inflation and Elections

A key point of discussion was the Federal Reserve’s removal of language in its statement that expressed greater confidence in inflation being under control. Speculators believe the adjustments in language were influenced by the U.S. elections and potential shifts in monetary policy.

Jerome Powell, the Fed chair, responded to these speculations by emphasizing that the Fed’s strategy would not shift based on short-term inflation data or electoral results. He also clarified that the statement changes were simply a “drafting step” and were not intended as forward guidance for future policy.

Trump vs. Powell

The relationship between Donald Trump and Jerome Powell has been fraught with tension. Despite Trump appointing Powell in 2017, the former president repeatedly criticized Powell’s interest rate policies, claiming they were hindering U.S. economic growth.

There has been speculation that Powell might resign should Trump return to office in January 2025. However, Powell addressed these rumors during a post-FOMC press conference, stating that he would not step down if asked by Trump.

In the context of the ongoing crypto market performance, this FOMC decision continues to highlight the broader interplay between traditional monetary policy and the digital asset ecosystem, with potential long-term implications for how the market responds to future rate cuts or changes in economic strategy.