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Federal Reserve Debate Could Redefine Bitcoin’s Bull Cycle
As the Federal Reserve prepares for its next policy decision, a heated debate is emerging over whether the upcoming interest rate cut should be a modest 25 basis points or a bold 50 basis points. This choice could have sweeping implications for Bitcoin, Ethereum, and the broader crypto market, potentially reshaping long-held narratives like the 4-year Bitcoin cycle.
Fed Officials Divided: 25 or 50 Basis Points?
Fed Governor Chris Waller is advocating for a cautious 25 bps cut, citing economic uncertainty and lagging data. “The FOMC should reduce the policy rate another 25 basis points,” he stated, highlighting persistent growth despite softening labor markets.
On the other hand, Stephen Miran is pushing for a more aggressive 50 bps cut, referencing US-China trade tensions and consumer impacts from tariffs. He anticipates a total of 75 bps in cuts this year, possibly split across three meetings. Minneapolis Fed President Neel Kashkari also supports rate cuts as a form of “insurance” against potential downturns.
What It Means for Crypto
Lower interest rates typically weaken the U.S. dollar and boost risk assets like crypto by increasing market liquidity. A 25 bps cut could provide modest support, while a 50 bps cut might trigger a stronger rally — though it could also signal deeper concerns about the economy.
This shift is leading traders and analysts to question the relevance of the 4-year Bitcoin halving cycle. Instead, attention is turning to liquidity trends driven by central bank policy.
The New Crypto Narrative: Follow the Liquidity
As one analyst put it: “The 4-year Bitcoin cycle is dead… What truly drove every peak? Liquidity.” With the Fed signaling a potential pivot toward monetary easing, the real catalyst for crypto may no longer be time-based cycles, but capital flows and macro shifts.
The crypto playbook is changing — and all eyes are now on the Fed’s next move.
