What impact does a 25 basis point Federal Reserve rate cut have on Bitcoin market liquidity and investor sentiment?
Why is this the correct answer?
When the Federal Reserve cuts rates by 25 basis points, borrowing becomes less expensive for banks and businesses, which can also spill over into risk assets like Bitcoin. Investors often feel more confident to allocate capital to higher-risk investments, raising liquidity in crypto markets. For beginners, this means more funds may flow into Bitcoin, supporting prices and activity.
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