In a surprising turn of events, altcoins surged on Tuesday in the U.S. afternoon hours as U.S. Treasury Secretary Scott Bessent floated the idea of a substantial 50 basis point rate cut by the Federal Reserve at its upcoming September meeting. This unexpected suggestion sent ripples through the cryptocurrency market, igniting a rally that saw ether (ETH) soar above $4,600 for the first time since November 2021.
Altcoins on the Rise
The cryptocurrency market was already buzzing with anticipation of a 25 basis point cut, but Bessent’s comments added fuel to the fire. “The real thing now to think about is should we get a 50 basis-point rate cut in September,” Bessent remarked on Fox News, pointing to what he termed a “foundational issue” in the central bank’s data accuracy. His words, though not coming from the Fed itself, carry weight given his role in selecting a potential replacement for Fed Chair Powell.
As a result, ether wasn’t the only altcoin on the move. Cardano (ADA), Solana (SOL), and Litecoin (LTC) each saw gains of around 8% over the past 24 hours, while XRP (XRP) increased by 3.5%. This rally wasn’t confined to cryptocurrencies alone; equity markets also enjoyed a boost, climbing more than 1%. For more on altcoin movements, see our coverage of XRP’s significant surge alongside Cardano and Chainlink.
Market Sentiments and Reactions
The broader market context is essential here. The rally began in the morning, following the release of new data that showed consumer prices rising in line with July estimates. This stable inflation picture, combined with the potential for a larger rate cut, seems to have bolstered investor confidence.
However, it’s important to note that Bitcoin (BTC), the cryptocurrency market’s bellwether, remained largely unaffected by the day’s excitement, trading at $120,000 with little change. Bitcoin bulls appeared content to observe from the sidelines, perhaps indicating that the altcoin rally was a more speculative play. This pattern of altcoin-led surges has been seen before, as detailed in our article on Ether and Dogecoin’s rally during a similar market shift.
Financial analyst Laura Chen notes, “The market’s reaction to Bessent’s comments underscores the sensitivity of crypto traders to potential monetary policy shifts. While Bessent is not a Fed member, his close ties to the decision-making process add a layer of credibility to his suggestions.”
Historical Context and Future Implications
This isn’t the first time the crypto market has responded energetically to macroeconomic cues. Historically, hints of looser monetary policy have often led to bullish behavior in digital assets, as investors seek returns outside traditional currencies and equities.
The market’s current trajectory raises questions about sustainability. Can this momentum hold if the Fed doesn’t deliver the anticipated rate cut? And what about the broader economic implications of such a move? A 50 basis point cut would be significant, indicating a more dovish stance from the Fed in response to economic uncertainties.
As the September Fed meeting approaches, all eyes will be on incoming economic data and further signals from policymakers. The crypto market, ever reactive, will continue to be a barometer of investor sentiment towards these developments.
For now, the crypto community is riding high on the wave of optimism generated by Bessent’s comments. But with the inherent volatility of digital currencies, the journey to September remains fraught with potential twists and turns. As always, traders and investors alike would do well to stay informed and cautious in navigating these turbulent waters.
Source
This article is based on: Ether, Cardano, XRP Among Cryptos Taking New Leg Higher as Scott Bessent Floats 50 Basis Point Rate Cut
Further Reading
Deepen your understanding with these related articles:
- Ether’s Rally Pulls Bitcoin Along: Crypto Daybook Americas
- Ether Volatility Spikes on Rally as Bitcoin Edges Back Toward Record Highs
- Ethereum surge signals incoming 200%-500% altcoin pump: Trader
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
