Bitcoin and altcoins may be on the verge of a bullish breakout following a surprising statement from a senior Federal Reserve official.
In a statement, Federal Reserve Governor Christopher Waller said the central bank could slash interest rates as early as its July meeting. He cited a slowing economy and noted that the impact of tariffs on inflation would be muted and short-lived.
Waller also said he believes the Fed’s benchmark rate is currently about 1.25% to 1.50% above the estimated neutral rate. He said:
“I think we’ve got room to bring it down, and then we can kind of see what happens with inflation. We’ve been on pause for six months to wait and see, and so far the data has been fine.”
His statement came two days after the Federal Reserve left interest rates unchanged between 4.25% and 4.50% and hinted that it will deliver two more cuts later this year.
It also came as the Fed faces substantial pressure from Donald Trump who has called for a full point cut. He has cited the European Central Bank, which has slashed rates eight times since last year.
A Federal Reserve cut would be a bullish catalyst for Bitcoin (BTC) and other altcoins like Ethereum (ETH), Solana (SOL), and Cardano (ADA). Historically, these assets do well when the Fed is cutting interest rates, such as during the COVID pandemic in 2020 and 2021.
Waller’s statement comes as third-party data shows growing demand for Ethereum and Bitcoin from Wall Street investors, possibly in anticipation of a Fed policy shift.
Spot Bitcoin ETFs added $389 million in inflows on Wednesday, bringing total inflows this month to $2.28 billion. Over the past three months, they’ve added more than $10 billion, with cumulative inflows reaching $46.65 billion.
Similarly, spot Ethereum ETFs have attracted nearly $1.5 billion in inflows over the past three months, with total inflows now approaching $3.9 billion.
These flows help explain the declining supply of Bitcoin and Ethereum on exchanges, and why their prices may bounce back in the near term.
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