Hello Gate Square community!

✨We, who keep our finger on the pulse of the crypto world, are always on the radar of global macro events. Today, with the US Federal Reserve (Fed)'s December 2025 meeting just around the corner, there's only one question on everyone's lips: Will there be a rate cut, and how will it impact our assets, from Bitcoin to Ethereum? In this article, under the #FedRateCutPrediction heading, let's examine the Fed's potential move within the crypto context. Are you ready? Let's dive in!
Fed's December Meeting: What Are the Expectations?
December 9, 2025... The Fed's Federal Open Market Committee (FOMC) will make a critical decision during its two-day meeting, which begins today and concludes tomorrow (December 10). Market experts and derivatives markets are signaling that a rate cut is imminent. According to the CME FedWatch Tool, the probability of a 25 basis point (0.25%) cut is hovering around 87-89%. This would be the Fed's third consecutive rate cut in 2025 – having already cut interest rates twice this year.

The current federal funds rate, after recent cuts, is around 4.50%-4.75%. If a rate cut comes, it will fall to 4.25%-4.50%. Why so optimistic? Slowing inflation, a stabilizing labor market, and a soft landing in economic growth are driving the Fed. However, some FOMC members are divided: Some say "further rate cuts are premature," while others say "let's support the economy." Still, economists are largely betting on a December rate cut.

So, why is this Fed move exciting for crypto investors? The answer is simple: Rate cuts increase liquidity and whet the appetite for risky assets (yes, including crypto!).

How Will a Fed Rate Cut Affect Crypto Markets?
While crypto is the "rebellious child" of traditional finance, it's also been affected by the Fed's decisions. Consider the historical data: The first price cuts in 2024 propelled Bitcoin from $70,000 to $100,000, triggering an altcoin rally. In 2025, the Fed's cautious approach (keeping interest rates steady for most of the year) caused market volatility—remember, Bitcoin experienced a sharp decline in October. But in recent weeks, anticipation of the price cut led to signs of recovery: Bitcoin rose 4.5 percent in the last 24 hours and is pushing $95,000.
Positive Effects:
Increased Liquidity: Low interest rates make borrowing cheaper. Institutional investors are given the green light to inject more capital. The result? Increased inflows into crypto exchanges, and majors like BTC and ETH rise.
Risk Appetite: When interest rates fall, "safe" assets like bonds lose their appeal. Investors seek high returns – and crypto is the star of this game. According to 2025 estimates, even two price cuts could push the crypto market capitalization from $3 trillion to $5 trillion.

Dollar Index Pressure: A price cut weakens the DXY (Dollar Index). This, in turn, pushes dollar-denominated crypto prices higher – as crypto is seen as an alternative to the dollar.

Risks and Volatility: Like every good story, this one also comes with a bit of drama. In the short term, price cuts can be followed by a "buy the sell" effect – for example, ETH fell 5% during the second price cut in October 2025. Furthermore, a "surprise" Fed hold decision (although unlikely) could shake the market and push BTC to $80,000. Longer term, additional price cuts projected for 2026 could send DeFi tokens and Layer-1 cryptocurrencies like Solana soaring. Friends of Gate Square, remember: Crypto dances in the Fed's shadow, but it also plays its own rhythm. ETF flows, regulation, and post-halving momentum are supporting the discount-free rally.
A Golden Opportunity for Crypto?
My #FedRateCutPrediction? Yes, tomorrow's meeting will yield a 25bp cut, fueling a crypto rally. Bitcoin could surpass $100,000, and Ethereum could shine with staking returns. Altcoins? Speculatives like XRP and DOGE are buoyed by the wave of liquidity. But please, this isn't investment advice – DYOR (do your own research) and manage your risks!
What do you think? How did you position your portfolio after the Fed cut? Share it in the comments, and let's discuss!