Fed pause is a ‘green light’ for investors; here’s what it means for crypto

A decision from the United States Fed to pause and possibly lower interest rates next year will likely serve as a “positive boost” for cryptocurrencies and crypto stocks.

In a Dec. 13

Teng said investors can expect to see similar bullish trends not seen since previous rate-cute cycles, something that will be amplified by institutional interest in pending spot Bitcoin ETFs, which are currently slated for a decision in early January.

However, Andersson added that a side effect of lower interest rates could be the cooling of the real-world asset (RWA) tokenization narrative, with expected increases in DeFi yields becoming more attractive to investors in a low-rate environment.

“A lot of the interest so far has been in tokenizing treasuries. We now see an environment where we can generate in excess of 10% yield in DeFi while traditional yields are heading the opposite direction,” he added.

Like many market commentators, Teng and Andersson both looked to the upcoming Bitcoin halving — currently slated for April next year — as a major catalyst for overall crypto market growth in 2024.

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