On October 29, 2025, the American Federal Reserve reduced its interest rates by 25 basis points (0.25%), a decision expected by the markets. Jerome Powell, Chairman of the Fed, justified this measure by a slowdown in the labor market and controlled inflation. This announcement could have major repercussions on cryptocurrencies, which are often sensitive to monetary policies.
In brief
- The Fed is cutting rates by 25 bps (0.25%), a decision made to support a weakened labor market and maintain economic growth.
- Bitcoin and cryptos could react positively to the rate cut and cause a powerful rally.
- The Trump-Xi Jinping meeting on October 30 could amplify or moderate the impact of the rate cut, depending on the trade agreements reached.
Fed rate cut by 0.25%
The American Federal Reserve (Fed), led by Jérôme Powell, officially reduced its key rate by 25 basis points (0.25%) on October 29, 2025, bringing it within a target range of 3.75% to 4.00%. A decision which aims to support the American economy faced with a labor market in decline, with only 75,000 jobs created monthly since January 2025.
Jérôme Powell highlighted earlier this month that layoffs and hiring remained low, despite consumption still supporting growth. This rate cut by the Fed marks the start of a cycle of monetary easing. This, with a possible further reduction in December if economic data justifies it.
Which cryptos will benefit the most from this drop?
Bitcoin remains the most closely watched asset, with optimistic forecasts from analysts like Tom Lee and Arthur Hayes. These experts believe that bitcoin could reach $130,000 if the Fed maintains an accommodative monetary policy. Altcoins including ethereum, solana and XRP could also benefit from this increased liquidity.
Projects related to AI and tokenization are particularly closely monitored. Institutional investors are increasing their exposure to cryptocurrencies, seen as lucrative assets in a low interest rate environment. However, a disappointment in the future path of rates could lead to a correction, as observed after previous cuts.
What to watch for in the coming weeks?
The future trajectory of the Fed after the speech on rate cuts by Jerome Powell will be decisive. Indeed, a further rate cut in December is possible, but nothing is guaranteed. Inflows into crypto ETFs, on-chain activity and positions of large investors will be key indicators.
Furthermore, the geopolitical impact should not be overlooked. The meeting between Donald Trump and Xi Jinping scheduled for October 30, 2025 in Busan, South Korea could influence the markets! Especially, if there is a trade agreement. An easing of Sino-American tensions would be an additional catalyst for risky assets, including cryptos.
The Fed’s 25 bps (0.25%) rate cut is a strong signal for the crypto market. But its impact will depend on Jerome Powell's ability to reassure about the rest of the monetary cycle. If liquidity abounds, bitcoin and altcoins could experience a historic end to the year. On the other hand, too careful communication could temper enthusiasm. Do you think this rate cut will trigger a crypto bull run?
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