Simon Peters, Market Analyst at eToro has shared that, Crypto markets surged 10% last week as the US Federal Reserve reduced interest rates by 50 basis points, marking the Fed’s first rate cut in four years. The federal funds rate now ranges from 4.75% to 5.00%, down from its previous range of 5.25% to 5.50%. This move follows progress toward the Fed’s 2% inflation target since the July meeting.
Bitcoin climbed 6%, reaching $64,000—levels last seen on August 26. Spot Bitcoin ETFs also attracted $412 million in inflows. Notably, the Fed’s released "dot-plot," which outlines long-term interest rate forecasts, indicates the federal funds rate could drop to a range of 4.25%-4.50% by year-end. This suggests further rate cuts are likely in the Fed’s November and December meetings.
According to CME FedWatch, markets anticipate a federal funds rate of 4.00%-4.25% by the end of the year—a total reduction of 75 basis points from current levels. Investors will be closely monitoring Friday’s Personal Consumption Expenditures (PCE) inflation data, the Fed’s preferred inflation gauge. A lower-than-expected figure could drive markets even higher in anticipation of more aggressive rate cuts.
Meanwhile, a survey by eToro highlights significant crypto adoption in the UAE, where 74% of retail investors hold crypto assets. This reflects the country’s progressive regulatory environment and the growing appeal of crypto as a diversification tool. Key drivers include the potential for high returns (cited by 40% of investors), belief in crypto’s transformative potential (36%), and trust in blockchain technology (31%).
