What happened?
The Federal Reserve cut its benchmark rate by 25 basis points to 3.75%–4% in a split 10-2 vote, the second straight cut as officials try to support a cooling labor market. The move came amid a government shutdown that’s freezing much economic data and included a plan to end quantitative tightening on December 1. Markets reacted quickly with volatility — roughly $300 million liquidated in crypto within minutes of Powell’s speech, though Bitcoin later recovered above $112,000.
Who does this affect?
Crypto traders, whales, institutional desks and retail holders were directly hit by the fast price swings and liquidations. Broader markets — bond and equity traders, borrowers and savers — also feel the impact as lower rates and shifting liquidity change pricing and risk-taking. Companies and funds that hold large Bitcoin positions, ETF managers, miners and leveraged traders will be watching policy signals and balance-sheet moves closely.
Why does this matter?
Lower rates and the end of QT can boost risk assets and increase flows into crypto, giving bulls a macro tailwind even as Fed language keeps traders cautious. Expect near-term choppiness and a likely technical pullback to fill a CME futures gap around $111k–$110k before any sustained run higher. If institutions keep accumulating and macro conditions stabilize, the cut could spark bigger crypto inflows and push prices toward higher targets, but fragile liquidity and mixed Fed signals mean the path will be volatile.