Hello Gate Square community!

✨We, who always keep our finger on the pulse of the crypto world, are constantly watching global macro events. Today, as the December 2025 meeting of the US Federal Reserve (Fed) approaches, there’s only one question on everyone’s mind: Will there be a rate cut, and how will this affect our assets, from Bitcoin to Ethereum? In this article, under the title #FedRateCutPrediction , let’s analyze the Fed’s potential moves in the context of crypto. Are you ready? Let’s get started!

Fed’s December Meeting: What Are the Expectations?
December 9, 2025... The Federal Open Market Committee (FOMC) of the Fed will make an important decision at its two-day meeting, starting today and concluding tomorrow (December 10). Market experts and the derivatives markets are showing a high probability of a rate cut. According to the CME FedWatch Tool, the probability of a 25 basis point cut (0.25%) is hovering around 87-89%. This would be the third consecutive rate cut by the Fed in 2025 – after already having cut rates twice earlier this year.

The current federal funds rate, after recent cuts, stands at about 4.50%-4.75%. If there’s another cut, it will drop to 4.25%-4.50%. Why such optimism? Slowing inflation, a stable labor market, and a soft economic landing are driving the Fed. However, some FOMC members are divided: some say “further cuts are too soon,” while others say “let’s support the economy.” Nonetheless, the majority of economists are betting that the Fed will cut rates in December.

Why are crypto investors so excited about the Fed’s moves? The answer is simple: rate cuts increase liquidity and stimulate risk appetite (yes, including crypto!).

How Will a Fed Rate Cut Affect the Crypto Market?
Although crypto is the “rebellious child” of traditional finance, it is still influenced by the Fed’s decisions. Just look at historical data: The first rate cut in 2024 took Bitcoin from $70,000 to $100,000, sparking an altcoin rally. In 2025, the Fed’s cautious approach (keeping rates steady for most of the year) made the market volatile – remember, Bitcoin dropped sharply in October. But in recent weeks, expectations of a rate cut have signaled a recovery: Bitcoin is up 4.5% in the past 24 hours and is heading toward $95,000.

Positive Effects:
Increased liquidity: Lower rates make borrowing cheaper. Institutional investors have the chance to inject more capital into the market. The result? A cash influx into crypto exchanges, with major coins like BTC and ETH rising in price.

Risk appetite: When rates fall, “safe” assets like bonds become less attractive. Investors seek higher returns – and crypto is the star of this game. Estimates for 2025 suggest that just two rate cuts could push the crypto market cap from $3 trillion to $5 trillion.

Pressure on the Dollar Index: Rate cuts weaken the DXY (Dollar Index). This pushes up the price of crypto assets denominated in dollars – since crypto is seen as an alternative to USD.

Risks and Volatility: Like any compelling story, this one isn’t without drama. In the short term, a rate cut can lead to a “buy the rumor, sell the news” effect – for example, ETH dropped 5% on the second rate cut in October 2025. Moreover, a decision to “hold steady” by the Fed (though unlikely) could shake the market and push BTC down to $80,000. In the long run, expected rate cuts for 2026 could send DeFi tokens and Layer-1 coins like Solana soaring. Dear Gate Square friends, remember: Crypto always dances in the Fed’s shadow, but it also has its own rhythm. ETF inflows, regulatory changes, and post-halving momentum are supporting the rally even without a discount.

A Golden Opportunity for Crypto?
My view #FedRateCutPrediction? Yes, tomorrow’s meeting will bring a 25 basis point rate cut, fueling a strong crypto rally. Bitcoin could surpass $100,000, and Ethereum will shine thanks to staking yields. What about altcoins? Speculative coins like XRP and DOGE will benefit from this liquidity wave. But don’t forget, this is not investment advice – DYOR (do your own research) and manage your risks!

What do you think? How have you adjusted your portfolio after the Fed’s rate cuts? Share in the comments and let’s discuss!