Fed Rate Cut Boosts Crypto and Stock Leaders by 7% on Average Gains

- Bitcoin, Ethereum, and Dogecoin Prices Rise Sharply - Federal Reserve Cuts Interest Rates, Stimulates Economic Activity [Unblock Media] The cryptocurrency and stock markets are once again on fire. As of 1 PM Eastern Standard Time (3 AM Korea Standard Time), Bitcoin rose 6.5% to reach $63,700. Ethereum increased by 7.6% and was trading at $2,470, while Dogecoin rose 6.3% to be traded at $0.1068. With significant increases seen in both the cryptocurrency and stock markets, these two markets show a high correlation. This is particularly notable between high-growth stocks and cryptocurrencies. The rise is attributed to the Federal Reserve's decision to cut the base interest rate by 50 basis points (0.5%). Lowering the base rate allows companies to procure funds at lower costs, fostering an environment that promotes investment and expansion. In this scenario, high-yield assets like stocks and cryptocurrencies gain more popularity. However, the background for the rate cut involves the slowing growth rate of the U.S. economy and a slight rise in the unemployment rate. Although inflation is currently not an issue, rising unemployment and a decrease in consumer spending could signal a looming recession. For example, if consumer spending decreases, corporate earnings will drop, potentially leading to higher unemployment rates. Reduced demand then leads to decreased production, which can have a negative impact on the overall economy. Today, these concerns are being pushed aside, and investors are diving into all kinds of assets, particularly cryptocurrencies. Both the stock market and the cryptocurrency market are reacting strongly to the Federal Reserve's interest rate cut policy, and additional future rate cuts are also expected to have significant impacts on the markets. Bank of America has optimistically projected that there will be three more rate cuts by the end of this year. If this prediction holds true, it will likely have positive effects on the value of risk assets but could be bad news for the economy. While interest rate cuts benefit asset values, prolonged low rates can distort economic structures. This can generate asset price bubbles or negatively affect the long-term health of the economy. In summary, both the cryptocurrency and stock markets are reacting significantly to the Fed's interest rate cut policy, and further rate cuts are expected to continue having a notable impact on the markets.