A crypto analyst, Benjamin Cowen, has recently pointed out similarities between the present American economy and previous stages. He outlines some factors that may affect future policies of the Federal Reserve and the impact thereof on risk assets such as cryptos. According to Cowen, the Fed’s primary focus is reducing inflation from its current 2.92% to below 2%, which he believes might prompt rate cuts as early as September, ahead of the U.S. presidential election. The Fed aims to maintain the low unemployment rate, preventing adverse economic impacts.
Potential Rate Cuts and Crypto Market Dynamics
There is a possibility that in 2025, the Fed could lower its monetary guidelines similar to 2019, hence promoting the crypto markets in the following year. He points out that the bitcoin price behavior in 2024 matches the 2019 bitcoin price, and based on the four-year trend analysis, it looks like bitcoin can be summarized as the top cryptocurrency that repeats its value chart in the fourth quarter of the post-halving year. According to Cowen, Bitcoin is now in the final phase of pullback that lasts for roughly six months, and similar movements can also be observed in the Gold market.
Altcoins Expected to Outperform Bitcoin in 2025
Cowen expects a Bitcoin pop in 2025 but believes that altcoins will outperform Bitcoin this time. He also points out that Ethereum has remained lower than Bitcoin for the last two and a half years and reiterates that they have been trading in the same pattern. Consequently, he believes the altcoin market could experience a significant surge in 2025 after spending the rest of the year under pressure from Bitcoin and building momentum for next year’s rally.
Finally, Cowen’s study implies that the Fed’s anticipated policy moves and current economic developments might have far-reaching consequences for the cryptocurrency market. As the U.S. economy evolves, these events might pave the way for significant changes in Bitcoin and the larger cryptocurrency scene.
Also Read: Federal Reserve Signals Imminent Rate Cut Amid Economic Shifts
