tl;dr
Crypto markets experienced a rollercoaster week, reaching a $4 trillion peak before retreating into a weekend lull. U.S. stock markets hit record highs amid expectations of a 0.25% Federal Reserve rate cut, which is expected to be implemented on Wednesday due to a weakening labor market. However, ...
Crypto markets rode a rollercoaster last week, hitting a $4 trillion peak before fading into a weekend lull. Meanwhile, U.S. stock markets surged to record highs, buoyed by expectations of a 0.25% rate cut this week—a move the Federal Reserve is poised to deliver on Wednesday, citing a faltering labor market. But the economic story isn’t all sunshine: weekly unemployment claims spiked, hinting at deeper cracks in the job market.
The Fed’s upcoming meeting on September 18 is the week’s focal point. With CME futures betting a 96.4% chance of a 25 basis point cut, the central bank’s focus has shifted sharply from inflation to labor market weakness. “The Fed is now more concerned about a slowing economy than stubborn inflation,” one analyst noted, a pivot that could reshape investor strategies.
Crypto’s resilience amid macroeconomic turbulence is sparking intrigue. Bitcoin flirted with $116,000 twice in 24 hours before retreating, while Ethereum hovered near $4,630. Altcoins, however, faced headwinds, with XRP, Solana, and others posting double-digit losses. “Crypto is showing long-term hedging potential against inflation,” said Nick Ruck of LVRG Research, pointing to aggressive fiscal policies and Fed easing as tailwinds that could extend the crypto bull run into 2026.
But not everyone is bullish. JPMorgan’s Andrew Tyler warned that the Fed’s rate cut could trigger a “Sell the News” event, with investors pausing to reassess macro data. The Philadelphia Fed’s manufacturing index and jobless claims due on Thursday may offer clues, though neither is expected to sway markets significantly.
As the Fed’s decision looms, crypto’s mixed performance underscores its volatility. While Bitcoin’s brief rally to $116,000 hints at bullish momentum, the broader altcoin market’s selloff suggests lingering uncertainty. With stagflation fears and fiscal stimulus on the horizon, the question remains: Will crypto’s resilience hold, or is this just another chapter in its rollercoaster ride?