FalconX Research Director: Rate cut forecasts may not affect the crypto market in the long term, and the correlation between Bitcoin and major stock indexes has declined

"Global markets are anticipating a less dovish Fed in 2025," said Zaheer Ebtikar, founder of crypto fund Split Capital. "As a result, crypto event traders and market makers are reducing risk." Federal Reserve officials cut their benchmark interest rate for the third time in a row on Wednesday, but kept a lid on the number of cuts expected in 2025. Lower interest rates typically increase demand for most riskier assets, such as cryptocurrencies. David Lawant, head of research at crypto prime broker FalconX, said that while rate cut forecasts are currently affecting prices, they may not have a long-term impact because Bitcoin's correlation with major stock indexes has fallen. "The slower pace of rate cuts expected in 2025 is not entirely surprising, but it has put some pressure on risk assets, including cryptocurrencies," said Lawant. "While macro factors have traditionally influenced cryptocurrency price action, sector-specific factors are likely to dominate in the coming weeks and months, especially as markets anticipate policy changes from the new administration." (Bloomberg)