Massive Crypto Pumps Ahead – Trump, Fed, FOMC Rates

Donald Trump ran on dropping interest rates saying it’s better for the economy. He wants them to come down and right now. And today is the first chance this could happen. The Federal Reserve’s FOMC will decide on interest rates this afternoon.

Will rates stay the same or go down?? We think it’s bullish either way and today we will show you why and wait there is another reason why a massive crypto pump is just 2 weeks away.

FOMC Expectation

Leading up to these meetings on Tuesday and Wednesday, most see the Federal Reserve keeping interest rates where they are with the prime lending rate at 7.5% and the fed funds rate at 4.5%. Polymarket has it locked down on no change.

The prime rate is the rate banks charge their best business customers. The fed funds rate, arguably more important, is the overnight lending rate that banks charge to other banks for providing temporary liquidity like meeting required reserves for upcoming withdrawals. The Fed Funds rate also affects yields on banking deposits and other things that center around bank liquidity.

The US Government added 256,000 jobs in December. But sadly, one of the top 3 categories for adding jobs is Government. I mention jobs here because the Federal Open Market Committee or FOMC tries to set interest rates and monetary policy by balancing the economy and jobs with also trying to keep inflation down. The job growth is at expectations when adjusted seasonally for more part-time jobs during the holidays. 

Meanwhile, inflation is coming down from where it was earlier in 2024. So all this sets the table for what most think will be a decision to keep rates where they are.

The Decision & What It Means for Markets

So the decision came down and the FOMC decided to hold the Fed Funds Rate the same. This is what we were expecting from the FOMC today. So it should not have a huge impact on markets. Many macro indicators are still good for Bitcoin and crypto. M2 money supply is growing. And you can see the relationship between M2 and Bitcoin here.  Stablecoin growth is another area. 

Stablecoin growth = crypto growth. Money only covers from dollars or Euros to stablecoins when people are ready to buy. And buy they will. Now the impact may not be as big as when interest rates are lower, but things are still looking good across crypto. 

As you can see here, when the global M2 money supply increases, the price of Bitcoin does too. And after Bitcoin does, then alts do. Here with US Money Supply, it’s even more obvious. In late 2022 when the money supply was declining, we had a bear market in crypto. Since April 2023, the money supply has been increasing, and not coincidentally, the price of Bitcoin has increased, too. It’s one of the best macro indicators we have.

If more money is floating around, then it has to go into assets that make more money. Otherwise, the new money in the system will lose purchasing power due to inflation. An increasing money supply, as we are seeing now, is good for Bitcoin and crypto.

Chinese New Year Also Bullish

The Chinese New Year, which is today as we enter the Year of the Snake, is usually a good time to buy Bitcoin. It’s generally bullish for crypto too. As the Chinese go back to their families in smaller towns and villages, they share with those close to them what Bitcoin is about, and more people buy it.

Crypto then often follows. It also helps explain why prices have been sideways for Bitcoin and down for the rest of the market recently.  As this “largest human migration on Earth” of more than 2 billion people traveling happens. Guess what? People aren’t trading as much. This helps explain recent performance.

And after the New Year, many coins connected to or originating from Chinese projects pump. And some pumps are big like Conflux did in 2023. Some of these coins could include:

• Tron.
• Neo, which has been sold to us as the Chinese Ethereum for years.
• VeChain.
• Zilliqa.
• And Filecoin among others.

Like the new, hot topic of Made in the USA, CoinGecko has a Made in China list too. These coins could see abnormally high volumes over the next 2 weeks.

Disclaimer

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