UBS forecasts a 75-100 basis point rate cut by 2025, which might affect both traditional and cryptocurrency markets.
UBS Rate Cut Predictions
UBS analysts, including Arend Kapteyn and Bhanu Baweja, expect a rate cut of 75-100 basis points by 2025 amidst current inflation concerns. These shifts are linked to potential monetary policy adjustments being discussed by the Federal Reserve.
Impact on the Crypto Market
Cryptocurrency markets traditionally respond to rate changes with volatility, but often experience increased investment afterward. Enthusiasts and analysts foresee an increase in risk asset investments, including cryptocurrencies, due to the anticipated rate cuts. Arthur Hayes and Raoul Pal have previously identified such cuts as pivotal for liquidity influx, attracting significant attention to digital currencies.
Bitcoin and Historical Trends
Bitcoin followed a similar trend during Federal Reserve rate cut cycles, initially showing volatility before rallying. Currently, Bitcoin stands at $83,589.80, with a market cap exceeding 1.66 trillion dollars. Over the past 90 days, Bitcoin has declined by 13.27%, but with a market dominance of 62.00% and a 24-hour trading volume of 53.52 billion dollars, the investment trends continue to fluctuate.
UBS's predicted rate cuts could enhance DeFi activities and drive global crypto adoption. These changes may also impact technological innovations around digital assets.
