Experts assess that macroeconomic prospects are giving positive signals about the future of cryptocurrencies. With the Fed’s lowering of interest rates, serious fluctuations are expected, especially in the crypto money markets. BitMEX CEO Stephan Lutz shared his views with the public.
The Fed is working hard to stop the rising inflation rates, especially due to the disruptions experienced during the pandemic period. It is seen that the tightening monetary policies that have been followed for a while with this target have started to yield results. When we look at the middle of 2022, inflation rates, which reached a peak of 9.1 percent in the USA, are tried to be brought under control with gradually increased interest rates and parallel supportive measures. Accordingly, interest rates were increased from 0.25 to 5.00-5.25. However, in the future, a different market environment may arise for investors as these policies are abandoned and gradual decreases occur.
Investors may have certain tendencies in a financial course with high interest rates. In such a conjuncture, investors in the markets can position their current assets to focus on interest income, especially with the increase in interest income. As a result of all these, there is a serious slowdown in cash inflows to the crypto money markets and the door to a stagnant period is opened in the markets.
Macroeconomic expectations for the upcoming period continue to support the markets. If the gains from the tightening monetary policies implemented for a while are found to be sufficient, gradual decreases in interest rates both in the last period of the year and in the first period of 2024 seem likely. This may lead investors to invest in different financial instruments and accelerate the transition to alternative markets by exiting the traditional money markets.
Investors who want higher returns can turn to cryptocurrencies with significant price increase potential. Thus, cryptocurrency markets can attract investors looking for alternative investment opportunities. The increased demand could potentially increase the prices of cryptocurrencies as well. In light of all this, the realization of the expectation that interest rates will fall may lead investors to allocate their assets to cryptocurrencies, which are more volatile and are known for their rapid profit potential. In this way, we can see a market in which price activity accelerates with the increase in trading activities in the markets.