Key Points
- •FedWatch anticipates a 94.6% chance of October's rate cut.
- •Potential macroeconomic impacts on crypto markets.
- •Emphasis on institutional crypto inflows.
On October 7, CME's "FedWatch" data shows a 5.4% chance of the Fed holding rates and a 94.6% probability for a 25 basis point cut.
Such a significant rate cut expectation has implications for cryptocurrency markets, potentially influencing investor behavior and asset flows, particularly in Bitcoin and Ethereum.
94.6% Rate Cut Forecast Sparks Crypto Market Optimism
The latest CME FedWatch data indicates a 94.6% chance of a 25 basis point rate cut in the Federal Reserve's October meeting. Market speculation has grown as investors await confirmation of this outlook. CME Group, responsible for the FedWatch Tool, has yet to release additional executive commentary regarding these probabilities.
Market responses suggest optimism regarding potential Fed actions. Notable figures have remained publicly silent about specific FedWatch predictions, yet overall sentiment appears cautious but leaning positively in anticipation of a dovish shift. Institutional buyers, including major investment firms, are already making strategic moves toward cryptocurrency holdings.
"A key driver of the Bitcoin price increase was ETF inflows. However, [there are] other factors... such as 'exchange supply tightness, USD weakness'" — Vincent Liu, CIO, Kronos Researchsource.
Interest Rate Movements and Historical Crypto Volatility
Did you know? Historically, surprise rate cuts by the Fed have triggered significant rallies across cryptocurrency markets, indicating investors' preference for riskier assets when monetary policy turns accommodative.
According to CoinMarketCap, Bitcoin (BTC) is currently priced at $125,792.42, with a market cap of $2.51 trillion and market dominance of 58.34%. Trading volumes have decreased by 8.32% in the past 24 hours. Bitcoin's price increased by 2.08% in 24 hours, 10.43% over 7 days, and 15.42% over 90 days. Circulating supply stands at 19,929,087 BTC, approaching its maximum supply of 21 million BTC. Data attributes to CoinMarketCap as of October 6, 2025.
The Coincu research team suggests that significant crypto inflows from ETFs, paired with favorable policy shifts, could further influence BTC's price stability. Historical patterns show that dovish monetary actions have been met with increased interest in cryptocurrencies like BTC and ETH, potentially boosting the crypto market's outlook.