The U.S. Federal Reserve’s recent decision to pause interest rate hikes—and potentially lower rates in 2024—may give a needed jumpstart to cryptocurrency prices and related stocks, according to market watchers. During this week, BlackRock fund chief Jeffrey Rosenberg labelled the move as a “green light” for investors as the S&P 500 saw a 1.37% jump.
Analysts noted that the shifted outlook on interest rates could propel adoption of cryptocurrencies among institutional and retail investors—validated with the 7.7% surge in Coinbase’s stocks and record-level injections into crypto investment products[i], as highlighted by CoinShares’s data. Taking into consideration this rush to embrace the market, Henrik Andersson, apollo crypto’s chief investment officer, foresees the drivers behind the process being increased inter-institutional activity and the slated 2024 Bitcoin halving.
Though Andersson recognizes that these wide approbations could lead to a significant appreciation of the tokenized assets, he sees the prolonged period of yields “flatline” in DeFi reducing participants’ million size in comparison to “real-world”[ii] holdings. That inflation in Defi should inversely fatigue the thrill for FIRES, moderating futures eagerness.
[i] – Crypto investment products such as crypto funds and blockchain equity
[ii] – Assests embodied in tangible and/or intangible form, that may have an exchangeable market value.
