Crypto expert Lark Davis says the Federal Reserve (FED) has thrown a wrench into the crypto market. While the FED cut interest rates by 25 basis points - a move that usually boosts markets - it wasn’t all good news. Other FED decisions spooked investors and caused a ripple effect in crypto.
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The FED’s cautious outlook for 2024, shown in its “dot plot,” predicts only two rate cuts next year. Markets were hoping for more. Inflation concerns and plans to release more FED-held assets, which could increase market sell pressure, added to the uncertainty.
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Davis explained that while this slow approach might seem frustrating, it shows the FED isn’t panicking - something that could actually help markets in the long run.
On the bright side, Davis highlighted strong U.S. economic performance, like 3% GDP growth and no immediate signs of a recession. He also speculated that the FED might cut rates more aggressively than it’s signaling now.
In crypto, Bitcoin is holding steady despite recent turbulence. Davis predicts it’ll stay on an upward trend but warns that big dips and corrections are normal. He’s also optimistic about altcoins, pointing out that they often rally after FED announcements like this.
Davis shared some investment opportunities, such as Beam, a gaming-focused coin on Avalanche, and other innovative blockchain projects like Sonic, Aptos, and Sui. He believes these projects have strong potential in the coming cycle.
His advice for crypto enthusiasts? Brace for volatility, stay focused on long-term gains, and look for promising opportunities during dips. Davis is confident the crypto market is headed for growth - if you can weather the storm and think long-term.
