Key Points
- Cryptocurrencies surged after the Federal Open Market Committee (FOMC) cut interest rates for the first time since 2020.
- Neiro, Billy, and Baby Doge Coin were among the best-performing coins following the rate cut.
Cryptocurrencies experienced a surge following the Federal Open Market Committee’s decision to cut interest rates, the first such move since 2020. The committee hinted at further cuts in the future.
Meme Coins See Significant Gains
Meme coins such as Neiro (NEIRO), Billy (BILLY), and Baby Doge Coin (BABYDOGE) were among the strongest performers following the decision. Neiro’s value increased by over 120%, reaching a record high of $0.00084, a significant rise from its monthly low of $0.00036. The coin’s intraday volume spiked to $794 million, and its market cap increased to $354 million.
Billy, another well-known small-cap meme coin, rose by 60% to $0.043, pushing its market cap to over $32 million. Baby Doge Coin, which had already seen an uptick after being listed by Binance, continued its upward trend.
Larger coins also saw an increase, with Bitcoin (BTC) reaching $60,500 and Ethereum (ETH) climbing to $2,300. The U.S. stock market also rallied, with indices such as the Nasdaq 100, Dow Jones, and the S&P 500 nearing their all-time highs.
Interest Rate Cuts Amid Economic Slowdown
The FOMC decided to cut interest rates by 0.50%, citing a faster-than-expected deterioration in the labor market. This move was in line with the predictions of most Polymarket users, while Elizabeth Warren had advocated for a 0.75% cut.
Recent data indicated that the unemployment rate remained above 4% in August. U.S. inflation also showed signs of easing, with the headline consumer price index falling to 2.5% in August, marking its lowest point since 2021. Economists now expect a series of 0.50% rate cuts in the year’s final two meetings.
The last time the Fed cut rates, it triggered a strong rally in the crypto market, with Bitcoin reaching an all-time high of $68,000 in 2021.
The next significant macroeconomic event is the Bank of Japan’s (BoJ) decision on Friday. While economists anticipate the BoJ will maintain the current interest rates, a potential rate hike could narrow the interest rate spread between the two countries and disrupt the prevalent carry trade. A divergence between the Fed and BoJ previously led to a crypto Black Monday, pushing Bitcoin to its lowest point in months.
