For the primary time in 2025, the US Federal Reserve is preparing to cut rates of interest whereas the S&P 500 is buying and selling at all-time highs, and in line with The Kobeissi Letter, the time has come for an essential shift in markets that would usher within the subsequent crypto market bull run.
Because it stands, report inventory valuations, resilient GDP development, sticky inflation, and cracks are forming within the labor market, leaving the stage open for volatility in conventional markets that would spill over into the next explosive altcoin season.
Fed Fee Cuts At Document Valuations
Expectations are additionally excessive that the Fed will preserve reducing charges on the subsequent rate of interest resolution on Wednesday, September 17, 2025 and thru the tip of this yr. In response to a lengthy thread that was posted on the social media platform X, this might have long-term bullish results on the crypto business.
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The Federal Reserve normally cuts charges within the face of financial weak point and depressed fairness markets, however this time is completely different. As famous by The Kobeissi Letter, valuation metrics tracked by Bloomberg present US shares are dearer than ever, having surpassed even the 1929 pre-Melancholy peak and the dot-com bubble. Moreover, the S&P 500’s price-to-book ratio hit 5.3x in late August, its report degree.
Regardless of these extremes, policymakers are anticipated to chop by no less than 25 foundation factors this week based mostly on weakness in the labor market. Historical past reveals that when charge cuts occurred with shares inside 2% of all-time highs, as proven in 2019 and 2024, the S&P 500 delivered robust good points over the next yr. This uncommon combine may as soon as once more amplify capital flows into high-growth belongings, together with cryptocurrencies, within the final quarter of 2025.
A Excellent Time For Altcoins
Slicing charges into scorching inflation provides liquidity gasoline simply as buyers chase threat belongings. That backdrop has all the time induced highly effective surges for Gold, Bitcoin, and other major cryptocurrencies, because the return of those belongings thrives when fiat returns come below query.
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As The Kobeissi Letter framed it, the time has come. The Fed’s resolution to chop charges with shares at report highs, amid a 3% GDP development and scorching inflation 110 bps above the Fed’s long-term goal, might be the motive force of the subsequent altcoin season. Gold and Bitcoin have already been priced on this new period of liquidity, as each at the moment are up by 450% and 105%, respectively, since 2023.
The setup is even higher for altcoins like Ethereum, XRP, Chainlink, and most particularly cryptocurrencies concerned within the rising AI area of interest. There might be extra immediate-term volatility, however long-term asset homeowners will profit probably the most from the speed minimize.
Nonetheless, if the Federal Reserve opts for a slower tempo of cuts than markets are at the moment pricing in, the disappointment could ripple by means of each equities and cryptocurrencies and trigger short-term declines this week.
Featured picture from Getty Photos, chart from Tradingview.com