Featured Image from Unsplash.com, Chart from TradingView.com<\/div>\n","protected":false},"excerpt":{"rendered":"
A 50 basis points (bps) interest rate cut by the US Federal Reserve (Fed) starting this month might adversely affect Bitcoin (BTC) price, 10x Research cautions. 50 BPS Rate Cut Could Spook The Market After it had started hiking interest rates back in March 2022 to contain rampant inflation due to COVID-related supply chain bottlenecks and money printing, the Fed is now set to commence slashing interest rates to stimulate the economy. However, there is a possibility that by initiating a 50 bps rate cut, the Fed might raise the alarm for risk-on assets such as Bitcoin. Data released on September 6, 2024, from the Bureau of Labor Statistics stated that while unemployment has decreased slightly, the US economy generated fewer than expected jobs. This has paved the way for the Fed to embark on its rate-cutting cycle, as the central bank doesn\u2019t want high interest rates to cause irreparable damage to businesses.\u00a0 Related Reading: How Will The US Upcoming Fed Rate Cut Impact Bitcoin? QCP Analysts Weigh In 10x Research notes that a 50 bps rate cut on September 18, 2024, might signal a sense of uneasiness toward the economy. It could also, unintentionally convey that the Fed believes it is too late to manage the looming economic downturn, forcing investors to pivot away from risky assets such as stocks and cryptocurrencies. For the uninitiated, one basis point represents 1\/100th of a percentage point. Central banks worldwide typically increase or decrease interest rates by 25 bps or multiples, depending on the urgency. Notably, there were several instances in 2022 when the Fed hiked interest rates by 50 or even 75 bps to tackle inflation. In a note shared with clients today, Markus Thielen, founder of 10x Research, stated: While a 50 basis point cut by the Fed might signal deeper concerns to the markets, the Fed’s primary focus will be mitigating economic risks rather than managing market reactions. Adding: The probability of a 50 basis point cut is only 29%, contrasting our view and the prevailing consensus. The chorus is growing louder that the Fed is behind the curve, having missed signs of labor market weakness after being caught off guard in July. Critical For The Fed To Walk The Thin Line Macro trader Craig Shapiro echoed 10x Research\u2019s findings in a post on X, saying that despite the market pressure on the Fed to \u201cgo bigger and faster\u201d with rate cuts, it should not cave in by starting with a 50 bps cut.\u00a0 Shapiro added that the markets are addicted to liquidity, and in its absence, it \u201crevolts, sells off and finds the lower put strike level\u201d that forces the Fed to hasten rate cuts and provide more liquidity. Shapiro asserts that risk assets will decline in value until the Fed capitulates and gives the market what it wants. Related Reading: Arthur Hayes Predicts Bitcoin Price Crash Below $50,000 This Weekend In contrast, other analysts\u00a0think\u00a0that Bitcoin might start another rally around the start of October 2024. At press time, BTC trades at $55,296, with a total market cap of over $1.09 trillion, according to CoinGecko. Featured Image from Unsplash.com, Chart from TradingView.com<\/p>\n","protected":false},"author":619,"featured_media":640818,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[88240],"tags":[428,1119,78790,6664,1558,2007,7918,2472],"class_list":["post-640814","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news","tag-bitcoin","tag-btc","tag-btcusdt","tag-crypto","tag-cryptocurrency","tag-fed","tag-federal-reserve","tag-interest-rates"],"acf":[],"yoast_head":"\n
Bitcoin Price Could Face Challenges With 0.50% Fed Rate Cut, Warns 10X Research<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n