The U.S. Federal Reserve has ended its 10-month pause, cutting interest rates by 25 basis points this week. But the real bombshell isn’t the cut itself. It’s what comes next. Fed signals now point to multiple rate cuts ahead, a shift that could unleash fresh liquidity into markets.
And according to crypto analyst VirtualBacon, this could be the spark that sends Bitcoin and major altcoins into a powerful Q4 rally.
VirtualBacon pointed out that the Fed’s dot plots now suggest one to two more rate cuts by December. This easing cycle is important because lower interest rates usually boost high-risk assets like Bitcoin, making it easier for investors to put money into crypto.
The CME FedWatch data supports this view:
The focus has shifted from “if” the Fed will cut rates again to “how many times,” which is a positive sign for crypto markets.
The Fed’s decision is heavily influenced by slower job growth. Annual revisions between May and August cut 911,000 jobs from 2024–25 totals, showing employment is weaker than expected.
Fed Chair Powell noted that jobs are more important than inflation right now, signaling a dovish stance that supports market liquidity. However, Powell carefully avoided labeling this move a “one-and-done,” instead pointing to the dot plots, code for “more cuts are on the table.”
Rate cuts generally weaken the U.S. dollar and inject liquidity into risk assets like bitcoin altcoin.
Even with quantitative tightening continuing at a minimal pace of $5 billion per month, the main driver for crypto is rate cuts, setting up ideal conditions for a late-year rally.
Therefore, VirtualBacon’s analysis shows that the Fed’s policy shift could trigger a strong rally in Bitcoin and altcoins through Q4, giving crypto markets a potentially powerful finish to 2025.
Yes, the Fed signals one to two more rate cuts by December 2025, with market data showing a very high probability of this happening.
Lower interest rates typically weaken the U.S. dollar and inject fresh liquidity into markets, which often boosts high-risk assets like Bitcoin.
Bitcoin and large-cap altcoins like Ethereum, Solana, and XRP typically benefit from increased market liquidity and investor risk appetite.
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