Polymarket bettors have placed over $11 million in cumulative bets on how aggressively the Federal Reserve will change its monetary policy this September.
78% of Polymarket users bet $1.5 million on an interest rate decrease of 25 basis points. The second-largest prediction pool, with 21%, placed a total of $2.4 million on a rate reduction of 50 bps or more.
Polymarket data showed that the remaining 4% was spread across the “No change” and “25+ bps increase” picks. Although both outcomes seemed unlikely given Powell’s remarks, traders wagered a combined $7 million on these two markets.
Following last month’s Jackson Hole speech, market sentiment largely expects the U.S. apex bank to announce rate cuts by Sept. 17 and Sept. 18. As crypto.news reported, Federal Reserve chair Jerome Powell said the time for policy adjustments had arrived.
However, Powell shared no indications regarding how aggressively the Fed would change its policy approach. According to the regulator, incoming data and risk balancing would ultimately govern the bank’s final decision later this month.
Is the Fed’s pivot good for Bitcoin and crypto?
Public consensus suggests that Bitcoin (BTC) and the larger cryptocurrency market are poised for an upward trajectory if Fed rate cuts arrive. Reducing interest rates usually means more liquidity across assets since investors are more incentivized to borrow and deploy capital.
The expected Federal Reserve pivot could also occur heading into the year’s fourth quarter, a period that’s historically positive for Bitcoin and digital assets.
While August and September are usually bearish for asset classes, QCP Capital reiterated that October has the “strongest bullish seasonality.” During the last nine Octobers, Bitcoin has returned an average of 22.9% in gains.
In a note shared with crypto.news on Sept. 3, Fideum co-founder Darren Franceschini agreed with the historical data and market sentiment supporting a Bitcoin rally should the Fed implement rate cuts.
As the Federal Reserve signals a potential dovish pivot, the cryptocurrency market is bracing for significant shifts. Historically, Bitcoin has thrived in environments with accommodative monetary policy, and we could see similar upward momentum if rate cuts materialize.
Darren Franceschini, Fideum co-founder
Still, Franceschini advised cautious optimism ahead of the Fed’s policy decision later this month. Bitfinex analysts also warned of a possible 20% drop in Bitcoin, while QCP Capital predicted that BTC would find support at $54,000 before potential upside momentum.