#DecemberRateCutForecast The crypto market, led by Bitcoin (BTC) and Ethereum (ETH), operates as a risk-on asset class. This means its performance is inversely correlated with the cost of capital and global liquidity. When the Federal Reserve pivots from tightening (raising rates) to easing (cutting rates), it fundamentally changes the incentive structure for investors, creating a powerful tailwind for digital assets.
1. Lower Opportunity Cost of Holding Crypto
High interest rates make cash and Treasury bills attractive, offering “risk-free” yields (e.g., 5%). This creates a high opportunity