Looking at the overall outlook of the cryptocurrency market, the market value of all cryptocurrencies decreased by only 0.78% to $2.38 trillion.

Some digital assets, such as Mog Coin (MOG), Kaspa and Ripple, which were among the best performing altcoins of the day, increased by less than 6%. This shows that investors’ risk perception has not changed and they have a careful expectation in the market.

Economists expect the Federal Reserve to keep interest rates steady between 5.50% and 5.25% at this meeting. This decision about interest rates can have a significant impact on the markets.

According to Polymarket’s data, only 4% of participants in the $2.4 million pool predict that the bank will reduce interest rates by 25 basis points. This reveals that market expectations are largely that interest rates will remain constant.

This meeting is important because it can provide guidance on when the Federal Reserve will begin cutting interest rates. Inflation has fallen for three consecutive months and unemployment rates have increased, increasing speculation that the Fed will cut interest rates in September.

The alternative scenario may be that the Fed adopts a data-dependent attitude and follows developments that will affect interest rates. In this case, the bank will determine whether to make a cut in September by monitoring non-farm payrolls data due on Friday and the next consumer price index report. More information about an outage in September will be provided at the annual Jackson Hole Symposium.

The FOMC’s decisions have a great impact on asset markets. In 2020 and 2021, BTC and other altcoins rose significantly when the Federal Reserve cut interest rates to zero.

However, when the bank started increasing interest rates in 2022, this rise reversed, reducing the values ​​of Bitcoin and other cryptocurrencies. This shows how investors react to changes in interest rates and how crypto markets are shaped by economic policies.

One reason why Bitcoin and other cryptocurrencies may do well when the Fed starts cutting interest rates is because investors are hoarding large amounts of low-risk assets.

Money market funds attract attention with investors providing an average return of 5% and savings exceeding $6.1 trillion. But when interest rates fall, these assets will become less attractive. This could increase the likelihood of switching to riskier assets such as stocks, cryptocurrencies and Bitcoin ETFs.

As a result, this meeting may have a limited impact on cryptocurrencies because the interest rate pause has already been reflected in prices. Looking at previous Fed decisions, no major impact on Bitcoin prices has been observed.

However, the Fed’s future interest rate policies could lead to significant changes in crypto markets, and investors are watching this situation carefully.