Rate Cuts Loom: Will Bitcoin Skyrocket or Stumble in June?
Stocks waver as traders bet on June Fed rate cuts. Will Bitcoin surge or falter? Uncover the crypto market’s next move!
Markets in Flux: Fed Rate Cut Hopes Stir Stocks and Crypto
On May 5, 2025, U.S. stocks showed mixed performance, with the S&P 500 up 0.2% and the Nasdaq down 0.3%, as traders ramped up bets on Federal Reserve interest rate cuts starting in June. Futures markets now indicate a 75% chance of a quarter-point cut, driven by recent economic slowdown signals, including a 0.3% GDP contraction in Q1 2025. Bitcoin, trading near $94,000, held steady, but analysts warn of volatility as crypto often mirrors stock market sentiment.
What’s the Buzz?
The Fed’s upcoming May 6-7 meeting is expected to keep rates at 4.25%-4.5%, but traders are focused on hints about June. Lower rates make borrowing cheaper, boosting risky assets like stocks and cryptocurrencies. After a strong April jobs report added 228,000 jobs, some investors dialed back aggressive cut expectations, yet Reuters reports traders still anticipate three to four quarter-point reductions by year-end, potentially dropping rates to 3.25%-3.5%.
The Fed’s upcoming May 6-7 meeting is expected to keep rates at 4.25%-4.5%, but traders are focused on hints about June. Lower rates make borrowing cheaper, boosting risky assets like stocks and cryptocurrencies. After a strong April jobs report added 228,000 jobs, some investors dialed back aggressive cut expectations, yet Reuters reports traders still anticipate three to four quarter-point reductions by year-end, potentially dropping rates to 3.25%-3.5%.
Why It Matters
For new investors, rate cuts could be a boon for Bitcoin, which soared to $109,350 in early 2025 when rates were expected to fall. Lower rates reduce the appeal of bonds, pushing capital into crypto and stocks. However, if the Fed signals caution due to inflation or tariff-driven price hikes, Bitcoin could dip below $90,000, per TradingView analysts. Crypto’s correlation with stocks remains strong, so a stock market slump could drag BTC down too.
For new investors, rate cuts could be a boon for Bitcoin, which soared to $109,350 in early 2025 when rates were expected to fall. Lower rates reduce the appeal of bonds, pushing capital into crypto and stocks. However, if the Fed signals caution due to inflation or tariff-driven price hikes, Bitcoin could dip below $90,000, per TradingView analysts. Crypto’s correlation with stocks remains strong, so a stock market slump could drag BTC down too.
What’s Next?
Watch the Fed’s May 7 statement and Chair Jerome Powell’s remarks for clues. New investors should diversify, avoid panic trades, and stick to reputable exchanges. A June cut could spark a crypto rally, but uncertainty lingers.
Watch the Fed’s May 7 statement and Chair Jerome Powell’s remarks for clues. New investors should diversify, avoid panic trades, and stick to reputable exchanges. A June cut could spark a crypto rally, but uncertainty lingers.
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⚠️ NOTICE:
The information provided on trafy.io does not constitute investment advice or recommendations. All investment and trading activities involve risks, and readers are advised to conduct their own research before making decisions.
⚠️ NOTICE:
The information provided on trafy.io does not constitute investment advice or recommendations. All investment and trading activities involve risks, and readers are advised to conduct their own research before making decisions.
