Polymarket Sees 25 Basis Point Rate Cut Emerge as Frontrunner

The market has turned its attention to the Fed’s October 29 meeting. Polymarket investors believe a rate cut is almost certain. The 25 basis point cut scenario is clearly in the lead with a trading volume exceeding $5.4 million. The “no interest rate change” option remained at a volume of $4.5 million. There is only a 4% chance of a 50 basis point or greater cut, while the probability of a fixed rate is 7%. The 25 basis point cut is leading, and markets are pricing it in.

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US Political Uncertainty Boosts Rate Cut Expectations

Evercore ISI strategist Krishna Guha said the potential US government shutdown is complicating the Fed’s decision-making. Delays in data flow and a slowdown in public spending are increasing the likelihood of a rate cut in October. The slowdown in the labor market is also pushing inflationary pressures into the background and supporting the Fed’s cautious stance.

According to Guha, even if the Fed sends cautious messages, consecutive interest rate cuts will remain on the agenda until the end of the year. Markets have already priced in this possibility. Investors are closely following the scenario that the Fed will cut interest rates before the end of the year.

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US Debt and Money Supply Growth

US Representative Thomas Massie noted that the federal debt surpassed $37 trillion thanks to the One Big Beautiful Bill Act. US President Donald Trump signed the legislation on July 4, stating it could cut up to $1.6 trillion in federal spending.

Analysts suggest that growing budget deficits may prompt central banks to adopt looser policies like quantitative easing (large-scale bond purchases). This could inject liquidity into the financial system, creating a favorable environment for Bitcoin.

Bitcoin’s Growth Potential

Ryan Lee, chief analyst at Bitget crypto exchange, highlights that US debt rose from $26.7 trillion in 2020 to $37 trillion over five years—a 38% increase—while Bitcoin gained 925% during the same period. According to Lee, as debt grows, the likelihood of BTC reaching new all-time highs also increases.

Moreover, the US government might consider Bitcoin as a tool to manage its debt, potentially boosting BTC’s value in correlation with global money supply and inflation.

M2 Money Supply and Inflation Effects on Bitcoin Price

Debt servicing could drive a rise in the global M2 money supply, acting as a new catalyst for Bitcoin price. Jamie Coutts, chief crypto analyst at Real Vision, estimates that this could push BTC above $132,000 by the end of 2025.

Arthur Hayes, co-founder of BitMEX, adds that if the US Federal Reserve returns to QE and inflation pressures rise, BTC could climb as high as $250,000.

These developments indicate that rising inflation and expanding money supply could serve as significant bullish catalysts for Bitcoin.

This content is not financial advice. Markets carry high risk, and it’s essential to conduct your own research before making investment decisions.

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However, while some analysts interpret this move as a short-term bearish signal, others consider it an ordinary market correction.

After the US Federal Reserve (FED) announced a 25 basis point interest rate cut and plans for less interest rate cuts than expected for 2025, it caused a general wave of sales in the crypto market! After the big declines, analysts shared their latest views on Bitcoin price.

Weekly Decline Signal in Bitcoin

Anonymous crypto analyst Rekt Capital stated that Bitcoin has developed a ‘bearish engulfing candlestick’ pattern on its weekly charts. Rekt told his followers, ‘We need to wait for the end of the week to confirm this decline. A lot can change,’ he said.

According to Rekt Capital’s analysis, technically, this movement is currently considered as a correction. Weekly closing levels will be decisive.

Some analysts think this pullback should not cause concern. ‘This retracement is quite normal, we have experienced similar 8 times since October,’ Bitcoin Archive said. Crypto commentator James Lavish stated that ‘those who sell Bitcoin in response to the FED’s statements do not know what they have’.

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