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Binance CEO Richard Teng made comments that the possible interest rate cuts by the US Federal Reserve (Fed) will have significant effects on crypto markets. Teng emphasized that if interest rates fall, cryptocurrency prices could increase significantly. Stating that low interest rates provide liquidity to the financial system, Teng said that this could increase the demand for high-yielding and risky assets such as crypto.
Teng reminded that Bitcoin gained 375% in value, especially between February 2020 and February 2022, when interest rates were close to zero, and stated that interest rate cuts could have a similar effect. He also stated that low interest rates could increase inflation concerns, and this could lead some investors to cryptocurrencies to maintain their purchasing power.
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In addition to interest rate cuts, Teng stated that Bitcoin’s upcoming halving event and the launch of Bitcoin spot ETFs could also positively affect crypto markets, emphasizing that spot ETFs in particular could facilitate the transition from stocks to crypto and contribute to the increased liquidity directed to crypto markets.
Finally, Teng stated that September was historically a weak period for crypto markets, but prices began to recover from October, and that interest rate cuts could provide additional momentum to this recovery.
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