What the Fed's Rate Cut Decision Means for Crypto

Momentum is continuing to build in crypto, despite September being a historically weak month. Halfway through, Bitcoin has actually rallied 6.6% — which is quite the change from a historical average of a 3% loss for “Down-tember.”

And as the Fed nears what the market is widely considering to be a pivotal 25-basis point interest rate cut, it’s interesting to consider how it could add fuel to the crypto fire in Q4 (a historically very strong time for price action.)

According to eToro US analyst Bret Kenwell, September bucking the downtrend thus far speaks to the relative strength that's been building in crypto.

"From a longer-term perspective, I view those seasonally weak periods as opportunities," he said, noting any chop could be a very strong buying opportunity. "It might be easy or scary to say September tends to be a bad month. OK, well, October tends to be its best month by far."

The Fed Is Cutting Rates

It’s been a while since we could say that. December of last year to be exact. But now, it appears the Fed will cut rates by 25 basis points, or potentially even more. On Polymarket, bettors were giving about an 8% chance of a 50-basis point cut.

But either way, it’s clear at this point the big swing factor might not even be the size of the cut, but how the Fed frames it and what Fed Chair Powell has to say about how he’s looking ahead to future cuts.

On the one hand, inflation remains fairly consistently above the old 2% target. The latest inflation print came in at 2.9% for August. But Powell has been signaling that a weakening situation on the jobs front has become more top of mind.

Per the FT:

The broad-based economic slowdown is showing up in a cooling labour market. For several months, more private-sector industries have been shedding jobs than creating them. While the jobless rate remains low, it has edged higher over the year, and could rise faster as workers struggle to find suitable roles. Job-finding expectations fell to a record low in the New York Fed’s consumer survey for August. That said, large data revisions and the administration’s clampdown on foreign workers have muddied the statistics somewhat.

Stay tuned when Powell steps to the mic on Wednesday afternoon. It could just trigger Bitcoin’s long march to $175,000 that Fundstrat analyst Sean Farrell had predicted on Coinage back in January.

Pantera Triples Down on Solana

You’ve probably seen our interviews with Pantera — the big crypto fund that’s famous for its 10,000% return on Bitcoin. Well, they are back with another bet on Solana.

The firm announced yet another Solana digital asset treasury company — leading a $500 million placement in Helius Medical Technologies — sending shares in the company surging 160% on Monday.

The new Solana DAT joins an increasingly crowded field. Pantera already backed DFDV, which has been buying up Solana. But now Helius will not only be competing with them, but also with the Multicoin-backed Forward Industries and Sharps Technology. Perhaps all that Solana buying is why Solana has outperformed the rest of the crypto field so far this month, up 15%.

A reminder: These are all just basically running back the playbook on Saylor’s original thesis with his Bitcoin treasury company Strategy. But unlike Bitcoin, there isn’t an approved Solana ETF yet, meaning these Solana DATs are one way for Wall Street to get in on the party before those ETFs make their debut. Buyer beware if that enthusiasm melts when the ETFs launch.

Coinbase Eyes Its Own Token Launch

It appears Coinbase thinks the token-launching coast is clear, as the company signaled Monday that its Ethereum Layer-2 blockchain Base was exploring a token sale of its own.

This is both surprising and not surprising as Coinbase has expressed in the past that there would be no need to launch a token, and that it had no plans to explore one. But, now, under the Trump Admin, it’s clear we are living under a very different regulatory regime. With that in mind, it makes sense Base would want to leverage its own token.

That said, it does raise new questions. One of the biggest criticisms from Solana’s loudest fans has been that Ethereum is being vampire attacked by Base, or that the centrally run chain is slowly co-opting the chain. Base creator Jesse Pollak responded to those criticisms in an interview with Coinage last year, saying:

"I definitely don't think Base is vampire attacking Ethereum. I mean, this is the Ethereum strategy. It's scaling via rollups and Base has brought billions of dollars into the onchain economy on Ethereum," he said, adding that if it becomes so cheap and easy to use that Coinbase has no choice but to move user assets to Base — that would be a win for both.

Other Headlines in Web3:

• Tether to launch USAT stablecoin for US market with former White House crypto lead Bo Hines

• Standard Chartered says Ethereum to benefit more from DAT buying than Bitcoin or Solana

• 'I Encourage You to Exit': Bitcoin Treasury Nakamoto's Shares Plunge 50% After CEO Letter

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