78% of users wager on 25bp Fed rate cut

Polymarket bettors have placed bets totaling over $11 million on how aggressively the Federal Reserve will change monetary policy this September.

78% of Polymarket users have placed $1.5 million on a 25 basis point interest rate decline. The second largest pool of picks, 21%, have placed a total of $2.4 million on a 50 basis point or greater interest rate decline.

Polymarket data showed the remaining 4% was split between the “No Change” and “Up 25+ bps” choices. While neither outcome seems likely given Powell’s comments, investors placed a combined $7 million in bets on these two markets.

Following the speech in Jackson Hole last month, market sentiment largely expects the largest U.S. bank to announce a rate cut on September 17 and 18. Federal Reserve Chairman Jerome Powell said it was time for policy adjustments, Crypto.news reported.

But Powell gave no indication of how aggressively the Fed will shift its policy approach. Incoming data and balancing risk will ultimately determine the bank’s final decision later this month, the regulator said.

Is the Fed’s comeback good for Bitcoin and cryptocurrencies?

Public consensus suggests that Bitcoin (BTC) and the broader cryptocurrency market are poised for an upward trajectory if the Fed cuts interest rates. Lower interest rates typically mean more liquidity in assets, as investors are more incentivized to borrow and deploy capital.

The expected Fed reversal could also occur towards the fourth quarter of the year, which has historically been a positive period for Bitcoin and digital assets.

While August and September are typically bearish months for the asset class, QCP Capital reiterated that October has the “strongest bullish seasonality.” Over the past nine Octobers, Bitcoin has gained an average of 22.9%.

Fideum co-founder Darren Franceschini shared a note with crypto.news on September 3, stating that he agrees with historical data and market sentiment that Bitcoin will rise if the Fed cuts interest rates.

The cryptocurrency market is poised for significant change as the Federal Reserve signals a potential moderate pivot. Historically, Bitcoin has thrived in environments with accommodative monetary policy, and we could see similar upward momentum if interest rate cuts materialize.

Darren Franceschini, co-founder of Fideum

Still, Franceschini urged cautious optimism ahead of the Fed’s policy decision later this month. Analysts at Bitfinex also warned of a possible 20% drop in Bitcoin, while QCP Capital predicted that BTC would find support at $54,000 before potential upward momentum.