Bybit Crypto Insights Report: As the first interest rate cut since December 2024 looms, how might September rate cuts impact crypto and the short-term price targets for BTC and ETH?

Federal Reserve Chair Jerome Powell’s dovish remarks about a potential interest rate cut in September mark a pivotal moment for global financial markets. For the cryptocurrency industry — an asset class that’s highly sensitive to macroeconomic shifts — this dovish pivot could revive investor sentiment, increase liquidity and potentially spur a bull cycle. This article explores the implications of the potential rate cut on the broader crypto industry, especially short-term crypto performance. 

The potential rate cut could herald the beginning of a new rate-cutting cycle

Fed fund rates. Source: Trading Economics

Since December 2024, the Federal Reserve has adhered to a restrictive monetary policy stance, maintaining interest rates at 4.5% in an effort to curb potential inflationary pressures from Trump’s tariff policies. A rate cut in September would mark the Fed’s first easing move in 2025, signaling a potential shift in its policy framework from inflation containment toward economic stabilization.