In a major move, Federal Reserve Governor Christopher Waller just gave crypto investors a big reason to watch July closely. He said the Fed could lower interest rates as soon as next month, during the July 29-30 meeting.
In the recent interview, Waller said, “We could do this as early as July. I think we’ve got room to bring it down, and then we can kind of see what happens with inflation.” This statement has come after the Fed’s recent decision to keep rates steady between 4.25% and 4.50%, but with hints that two cuts might still come before the end of 2025.
Impact of Fed Rate Cut on Bitcoin and Crypto
The main thing is, when the interest rates drop, it becomes cheaper to borrow and easier to invest. So as a result, people are eager to invest their money flows into Bitcoin, Ethereum, and other risky assets. Higher interest rates often scare invertos wavy from crypto.
As Dan Raju, CEO of Tradier, put it, “High interest rates scare investors away from riskier investments like crypto, and the lowering of rates will be seen as a positive by the crypto investor community.”
In the past, crypto has shown how it became sensitive related to the Fed policy. In 2022, when the Federal Reserve raised rates aggressively from near 0% to 4.25-4.50% by year-end. As a result, Bitcoin and altcoin dropped sharply.
In 2023 and 2024, the Fed paused rate hikes, keeping them steady in the 4.25-4.50% range. This stability gave crypto room to recover. Bitcoin rebounded, and investor confidence began returning. There are two more factors which have fueled the crypto to recover: the launch of spot Bitcoin ETFs and the election of Donald Trump, seen as a crypto-friendly president.
Key Events to Watch in July
The crypto investors should watch the next big meeting of the Federal Reserve for July, as this can have a big impact for the crypto. If the Fed decides to cut interest rates, it could act as a powerful catalyst for Bitcoin, Ethereum, and the broader crypto market.
Additionally, the U.S. Bitcoin ETFs have pulled in more than $9 billion, led by BlackRock’s iShares Bitcoin Trust (IBIT) in the last few weeks. On May 22 alone, Bitcoin ETFs saw an impressive $432 million inflow. With Bitcoin ETFs still attracting strong inflows, a rate cut could help BTC test or even break past its all-time high of $111,970.
However, if the Fed keeps rates steady, crypto markets may stall or correct, especially if inflation remains sticky or if economic uncertainty grows.
