The FED is set to cut rates tomorrow, will that be a catalyst for bitcoin?

The FED will host its next policy meeting tomorrow, and the rumor is that they will announce their second consecutive rate cut.

This rate cut is a big deal because we hadn't seen rate cuts in roughly a decade before the most recent one.

The odds for a rate cut look something like this currently:

(Source: https://www.ccn.com/fed-meeting-bitcoin-price-analysis/)

The stock market has also been pricing in a rate cut as markets have been inching up much of the past few weeks.

The S&P 500 is only a few points off the all time highs.

What will this mean for bitcoin?

If a rate cut were to happen, it would be bullish for bitcoin, at least in theory.

It would indicate a willingness of the FED to be accommodative of markets and risky assets, even if they won't admit as much.

In general, an interest rate cut reduces the incentive to hold fiat currency. Rate cuts typically lead to higher inflation, which reduces the purchasing power of traditional currencies, which means bitcoin becomes attractive again.

We didn't see much reaction during the last rate cut for bitcoin, but with the charts and technicals reset it looks like we are all set up for a big move, we just need a catalyst.

Whether it will be the announcement of a rate tomorrow or Bakkt launching in a few weeks, we are likely to see a big move before the end of the month.

Stay informed my friends.

-Doc