The Fed is about to cut interest rates again. Can the crypto market really take off this time?

Recently, rumors have been swirling that the Federal Reserve might restart interest rate cuts. Every time there's a shift in monetary policy, the crypto space gets restless—could this be the prelude to another major bull run?

Let’s start with the most direct point: rate cuts mean more liquidity. When rates go down, putting money in the bank is less attractive, bond yields shrink, and capital seeking higher returns naturally looks elsewhere. Crypto, as a high-risk, high-reward asset class, has always been a prime candidate for this kind of capital. Looking back at the 2020 rate cuts, Bitcoin soared from a few thousand dollars to tens of thousands, fueled by both liquidity and sentiment. It was almost impossible for the market not to heat up.

There's also a deeper logic: every time we enter a rate-cutting cycle, concerns about fiat currency depreciation intensify. That's when the "digital gold" narrative for Bitcoin becomes even more compelling, especially for institutional investors. They may accelerate their inclusion of crypto in their portfolios as a hedge against inflation.

But on the flip side, the crypto market has never only depended on macro factors to rise. Regulatory policy direction, innovation in on-chain ecosystems, and whether market sentiment gets overly hyped—these are all equally critical. Rate cuts only provide a favorable environment; whether we see a truly healthy rally still depends on the fundamentals of the industry itself.

So, this wave of rate-cut expectations has certainly sparked new imagination in the market, but staying rational should always come first. In the next few months, it will be worth closely watching how traditional finance and the crypto world interact.