Cryptocurrency and other financial markets are assessing the potential implications of the Federal Reserve’s potential policy moves.

According to CNBC, Atlanta Federal Reserve President Raphael Bostic stated he is leaning toward just one interest rate cut this year as the central bank tries to combine limiting inflation risks with preventing an economic downturn.

In March, the Federal Reserve released projections indicating two quarter-point rate cuts in 2025. Nevertheless, Bostic stated Monday that the tariffs were higher than the central bank had anticipated at the beginning of the year.

Historically, interest rate cuts tend to be bullish for risk assets, including cryptocurrencies. When borrowing costs decrease and returns on traditional investments become less appealing, investors often seek higher yields on more speculative markets. This can lead to increased liquidity flowing into cryptocurrencies. Higher interest rates, on the other hand, tend to hurt cryptocurrency prices.

Crypto market action

Cryptocurrencies regained footing on Monday following a shaky start to the trading session, mirroring a broader recovery in risk assets. Bitcoin rebounded after falling as low as $102,000 on Monday, following a record weekly close of $106,600.

The top cryptocurrency by market capitalization has risen to $105,000. The crypto market's bounce continued throughout the early Tuesday session, while a few cryptocurrencies were trading lower.

At press time, BTC was up 2.3% in the last 24 hours to $104,864. ETH gained 4.09% to surpass $2,400. DeFi lending platform Aave outpaced other large-cap cryptocurrencies, rising 20% in the last 24 hours to $262. Maker was also up 7% over the same period.

Stellar, Shiba Inu, Avalanche and Dogecoin were up nearly 2%, while Tron (TRX) posted gains of about 4%.