Fed Rate Cut Odds Hit 96.7%: Liquidity Boost and Crypto Implications in 2025

The Federal Reserve’s 25 basis point rate cut this month carries a 96.7% probability, bolstered by September CPI data coming in below expectations from the U.S. Labor Department. This paves the way for further easing in October, with a 95.8% chance of 50 basis points cumulative by December, effectively pricing in monetary loosening.

Liquidity Returns, Risks Revive

Rate cuts signal capital’s starting gun, driving Treasury yields lower, weakening the dollar, and lifting asset prices. However, if inflation rebounds, markets could question the timing, sparking secondary volatility. In DeFi’s $150 billion+ TVL ecosystem, this liquidity influx revives risk appetite, with crypto often the first beneficiary.

Crypto’s Front-Runner Status in Rate Cycles

Historically, early cuts repair risk sentiment—Bitcoin rose 7% in the week after September’s cut, Ethereum 18%. ETF inflows hit $620 billion over five consecutive days, showing institutions aren’t exiting but awaiting confirmation like the official cut. Bitcoin’s correlation with yields at -0.8 positions it for gains as liquidity floods.

• Cut Odds: 25bp at 96.7%; 50bp cumulative 95.8%.
• Market Pricing: Full easing baked in.
• Crypto Edge: First liquidity penetration.

2025 Outlook: $130K-$200K BTC Consensus

Analysts forecast BTC at $130K-$200K by year-end. Changelly sees $123,849 in October; CoinDCX $131,500. VanEck targets $180K-$200K on ETF momentum. For investors, how to buy Bitcoin via compliant platforms ensures entry. How to sell Bitcoin and how to cash out Bitcoin offer liquidity. Sell Bitcoin for cash and convert Bitcoin to cash enable fiat conversions.

Trading Strategy: Risk-On Plays

Short-term: Long BTC above $108,500 targeting $115,000, stops at $106,000 (2% risk). Swing: Accumulate dips, staking for 5% APY. Watch CPI confirmation; below expectations, exit longs.

In summary, Fed’s near-certain cut unleashes liquidity, positioning crypto for early gains amid 2025’s macro shift.