According to analysts at Presto Research, the Fed’s decision to cut interest rates by 0.5% could spark a new altcoin season.
In a report published today, Peter Chung and Min Jung argued that although altcoins have had a slow start to 2024, the Fed’s rate cut could be a turning point for the sector.
Analysts noted that the Fed’s rate cut cycle could rekindle interest in altcoins, which have been overshadowed by higher-yielding traditional finance investments. “Altcoin growth has been limited by higher yields in traditional finance, shifting investors’ attention away from riskier crypto assets,” the report said. However, with lower interest rates, on-chain yields could become more attractive, potentially sparking a recovery in the altcoin market.
The Fed’s decision on Wednesday boosted both crypto and stock markets, with Bitcoin posting significant gains. As interest rates fall, investors are turning to riskier assets, including altcoins, which have typically underperformed in recent months.
*This is not investment advice.
