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▲ U.S., Bitcoin (BTC)
An analysis suggests that a strategy of waiting for a U.S. benchmark interest rate cut to buy cryptocurrency might actually cause one to miss opportunities. Bitcoin (Bitcoin, BTC) often moved ahead of the actual interest rate cut announcement, and by the day of the announcement, the news had often already been priced in.
According to 24/7 Wall St. on May 27 (local time), the U.S. Federal Reserve once again froze the benchmark interest rate at its Federal Open Market Committee (FOMC) meeting on April 29. This marks the third consecutive freeze this year. The prediction market reflects approximately a 97% chance of a rate freeze at the next meeting, to be held from June 16 to 17, and JPMorgan expects rates to remain unchanged until the end of the year. The media outlet reported that if this forecast is correct, the next rate cut could take 12 to 18 months or more.
24/7 Wall St. examined how the cryptocurrency market reacted to U.S. interest rate cuts since 2019. The conclusion was not simple. Some rate cuts triggered rallies, while others led to sell-offs. The key variable was not the rate cut itself, but whether the market had already priced in expectations of easing or interpreted it as a signal of a new policy shift.
The 2019 case was presented as the clearest example of pre-pricing. Bitcoin jumped from $9,000 in late June to $13,000 in mid-July, before the first rate cut on July 31 of that year. 24/7 Wall St. analyzed that Bitcoin rose 44% in the 4 to 5 weeks before the first rate cut but then fell by approximately 45% over the next 5 months. This suggests that expectations of easing were already priced in before the rate cut announcement, and profit-taking occurred afterward.
In March 2020, due to the COVID-19 shock, the U.S. Fed implemented emergency cuts of 50bp on March 3 and 100bp on March 15, but Bitcoin did not immediately rise. At that time, Bitcoin plummeted to $3,825 along with other risk assets. However, as liquidity spread through the financial markets, Bitcoin rose to $69,000 by November 2021. The media outlet viewed the interest rate cuts not as an immediate trigger for a rise, but rather as creating a liquidity environment where a rally could appear several months later.
The 50bp cut on September 18, 2024, produced the most distinct positive reaction in the recent cycle. Bitcoin rose approximately 6.6% in the week following the rate cut and maintained an increase of about 11% over the next month. After the 25bp cut on November 7, 2024, it rose 16% in a week and over 32% in a month. However, 24/7 Wall St. noted that in the case of the November rally, the effect of Donald Trump's election occurred two days before the rate cut, making it difficult to isolate only the Fed's effect.
Conversely, market reactions weakened during the December 2024 and 2025 rate cut phases. With the December 18, 2024 cut, the total easing across three meetings reached 100bp, but Bitcoin briefly surpassed $108,000 before and after the announcement, then fell below $100,000. Even during the 25bp cut on September 17, 2025, Bitcoin showed no significant reaction around $116,000 on the day of the announcement. 24/7 Wall St. analyzed that the recurring pattern in the seven interest rate cut cases was that cryptocurrencies moved ahead of reacting to rate cuts, and the greatest profit opportunities arose when the market took positions before policy shifts were priced in.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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