The Federal Reserve kept interest rates unchanged on Wednesday as investors now look ahead to a September decision that is unanimously expected to deliver the first rate cut since March 2020.

Traders are pricing in a 100% chance of at least a 25-basis point cut to rates, and about a 14% chance of a 50-basis point cut. Fed Chair Jerome Powell said Wednesday that a potential 50-basis point rate cut is “not something we’re thinking about right now” and signaled that any upcoming decision will continue to be based on incoming economic data. The price of Bitcoin and Ethereum both fell in late trading Wednesday, despite a rally in stocks.

But according to Ikigai Asset Management founder Travis Kling, a drop in interest rates will largely be supportive of digital asset prices and signals exactly the environment that should encourage crypto investors.

“Every major central bank in the world is now starting on an easing cycle and we're actually kind of the last … that is the backdrop under which you want to own Bitcoin,” Kling told Coinage Wednesday. “I think that macro monetary policy is going to be one of a number of tailwinds for crypto through the end of this year.”

Historically, a drop in interest rates has coincided with a rally in risk-on assets, including cryptocurrencies. This year presents somewhat of a novel application of that data, however, given the launch of ETFs for both Bitcoin and Ethereum. Both of those additions, coupled with a Bitcoin halving this past spring, do present somewhat of a unprecedented set up for the crypto market.

Nonetheless, Kling mentioned it’s hard not to feel optimistic about where prices could head given supportive economic policies.

“I'm still operating under the assumption that cheaper, lower interest rates and easier monetary policy is going to be stimulative for asset prices on the margin and stimulative for the economy,” he said.

Kling largely echoed bullish sentiment Coinage heard earlier this week from Fundstrat’s Sean Farrell, pointing out that a positive flip into net inflows for Ethereum ETFs could signal growing confidence among crypto investors. For the second day in a row, outflows from Grayscale’s Ethereum Trust seem to be slowing down as inflows in other Ethereum ETFs continue to grow.

“You're seeing real inflows into the other instruments so there is demand for this,” Kling said. “It just strikes me as pretty easy to imagine that you get some of the outflows drying up pretty quickly, you have relatively strong net inflows that continue and this just [winds up] being a really attractive entry point for ETH.”