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<\/p>\nA decision from the United States Fed to pause and possibly lower interest rates next year will likely serve as a \u201cpositive boost\u201d for cryptocurrencies and crypto stocks.<\/p>\n
In a Dec. 13 interview with Bloomberg, Blackrock fund manager Jeffrey Rosenberg described the Fed\u2019s rate pause \u2014 and its hint at rate cuts next year \u2014 as a \u201cgreen light\u201d for investors, with the S&P 500 rallying 1.37% on the decision. <\/p>\n
Crypto stocks have witnessed significant gains on the back of the announcement too, with shares of Coinbase (COIN) and MicroStrategy (MSTR) respectively spiking 7.8% and 5% on the day, while Bitcoin miner Marathon Digital (MARA) jumped 12.6%. <\/p>\n
Henrik Andersson, chief investment officer at investment fund Apollo Crypto told Cointelegraph that he expects today\u2019s pause and the expectation of lowered interest rates in the coming year to be a \u201cpositive boost\u201d for cryptocurrencies and crypto-related stocks, adding:<\/p>\n
Notably, blockchain equities recently experienced their largest weekly inflows on record, with a staggering $126 million flowing into crypto-related stocks, according to a Dec. 11 report from CoinShares. <\/p>\n
CoinShares’ head of research, James Butterfill, also found that digital asset investment products experienced their 11th straight week of inflows, posting another weekly gain of $43 million. <\/p>\n
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Tina Teng, market analyst at CMC Markets, told Cointelegraph the Fed\u2019s rate pause would undoubtedly increase market enthusiasm for crypto products. <\/p>\n
Related: <\/em><\/strong>Bitcoin to surge to $80K as stablecoins overtake Visa in 2024: Bitwise<\/em><\/strong><\/p>\n Teng said investors can expect to see similar bullish trends not seen since previous rate-cute cycles, something that will be amplified by institutional interest in pending spot Bitcoin ETFs, which are currently slated for a decision in early January. <\/p>\n However, Andersson added that a side effect of lower interest rates could be the cooling of the real-world asset (RWA) tokenization narrative, with expected increases in DeFi yields becoming more attractive to investors in a low-rate environment. <\/p>\n \u201cA lot of the interest so far has been in tokenizing treasuries. We now see an environment where we can generate in excess of 10% yield in DeFi while traditional yields are heading the opposite direction,\u201d he added. <\/p>\n Like many market commentators, Teng and Andersson both looked to the upcoming Bitcoin halving \u2014 currently slated for April next year \u2014 as a major catalyst for overall crypto market growth in 2024. <\/p>\n