The September Fed meeting has concluded, and the agency has decided on its first interest rate cut of 2025. The market saw volatility yesterday, but there is still plenty of positive long-term news for the crypto space.

Market Overview

Both the stock and crypto markets saw continuous volatility on the day of the Fed's interest rate announcement. On Wednesday (September 17th, US), the Dow Jones saw a gain of 0.57%, while the S&P 500 and Nasdaq fell by 0.1% and 0.33%, respectively. Stock futures saw slight increases across all three indices. Oil prices fell to $63.8 per barrel. Gold also corrected to around $3698 per ounce.

Bitcoin's price briefly surged above $117,000 before the Fed's announcement. Afterward, BTC's price fluctuated before settling back around $116,000. Most major altcoins saw slight gains. The overall crypto market capitalization is at $4.18 trillion.

US BTC spot ETFs saw outflows of $51.3 million on Tuesday. Inflows went to two funds, IBIT and GBTC, while most other funds experienced outflows. Following this trend, ETH spot ETFs also saw outflows totaling $1.9 million. The SOL ETF's net flow was zero.

Fed Cuts Rates by 0.25% as Expected

The Fed has just announced its first interest rate cut of 0.25% since 2024, which was in line with market expectations. It is anticipated that there will be two more cuts before the end of the year, in October and December, with a high probability of each being 0.25%. However, the dot plot shows that the pace of cuts will slow down after this year: the Fed only anticipates one more cut in 2026 and one in 2027, bringing the long-term interest rate to around 3%. Nevertheless, all Fed decisions remain subject to change depending on the actual economic situation, inflation, and employment data in the future.

While division has emerged within the Fed, the majority still supported the 0.25% cut. A dissenting opinion, advocating for a sharper 0.5% cut, came from new Governor Stephen Miran, who also serves as a White House advisor, raising concerns about the Fed's independence. Another member voted to raise rates. The market was initially excited when the Fed began its rate-cutting cycle, but the outlook for a slower pace after this year has left market sentiment somewhat disappointed and created short-term downward pressure.

In addition, new Fed Governor Stephen Miran proposed a third mandate for the Fed: controlling the yield curve to keep long-term yields low, thereby supporting the economy and reducing the government's borrowing costs. If implemented, the Fed would directly print money to buy bonds, which would lower yields and weaken the free market mechanism for pricing debt. This could make the bond market less secure, pushing capital into scarce assets like Bitcoin, with the expectation that it would strongly support price appreciation. However, in the long term, this policy poses risks of financial instability, inflation, and asset valuation distortions.

Summary of the Fed Press Conference

The Fed has lowered its lending rate by 0.25% and expects two more cuts before the end of the year, but forecasts only one cut in 2026, which is much lower than market expectations of 2 to 3 cuts. The Fed's dot plot shows only one projected rate cut for 2026, much lower than the market's expectation of 2 to 3 cuts. Some members predicted up to 4 cuts, showing significant internal disagreement within the committee. Stephen Miran, the new governor, was the only dissenter, advocating for a 0.5% cut. Chairman Jerome Powell said there was not much support for a larger reduction.

During the press conference, Chairman Powell noted that the labor market is cooling down. The unemployment rate has ticked up, and the pace of job creation has slowed, while inflation is rising and remains relatively high. However, he believes that while inflation and unemployment may increase slightly, they are expected to fall back down. Powell said President Trump's tariffs have so far been absorbed by importing companies, so consumer prices haven't risen significantly, though it's not certain that companies won't eventually pass these costs on to consumers. He also admitted that he could no longer call the labor market "strong." He stated that the Fed is in a difficult position where risks of both inflation and unemployment are high, and there are no perfectly safe solutions. He advised that the dot plot on future interest rates should be considered only as the Fed's best guess.

Many reporters asked repeated questions, mostly revolving around why the Fed chose to cut rates now, and whether it was due to recession fears or an early move to support the labor market. Some questions also focused on the fact that new Fed Governor Stephen Miran comes from the White House and whether this affects the Fed's independence. Chairman Powell did not give a clear answer on why rates were cut at this particular time and avoided all politically related questions. However, he did explain why the Fed is cutting rates while continuing to sell government bonds. He said the current bond sales are insignificant, and the Fed is nearing the end of this activity, meaning the quantitative tightening (QT) cycle is about to conclude. Overall, the Fed's tone was neutral, even slightly dovish. The outcome of the meeting was as the market had expected, with a rate cut at this September meeting and likely two more to follow this year. The only notable point was the Fed's forecast of only one cut next year, which is lower than market expectations.

SEC Approves New Crypto ETP Listing Process

The SEC has approved a unified listing standard for commodity ETPs (Exchange Traded Products), including Crypto ETFs, allowing them to be listed and traded without individual SEC approval if they meet certain conditions. If an ETP meets these new unified listing standards, the exchange only needs to post the necessary information on its website within five business days after it begins trading. This simplifies the process, saving time and resources for investors, issuers, and the SEC.

To qualify, the asset must:

• Be traded on a market belonging to the Intermarket Surveillance Group, a network of major exchanges like the NYSE, Nasdaq, and CME that share surveillance data to prevent fraud and market manipulation.
• OR have a futures contract that has been traded for at least 6 months on a market regulated by the CFTC.
• OR already have an ETF with at least 40% of its total net asset value directly tied to that commodity or asset, and be listed on a US national securities exchange.

Exchanges will still need to file rule changes for ETPs that do not meet the new standards, but qualifying ETPs can be listed and traded much faster and with a higher degree of predictability. This is a positive development for institutional crypto adoption, but it must be accompanied by transparent oversight to mitigate long-term risks.

In addition to this important news, the SEC has also approved the Grayscale Digital Large Cap Fund for trading. This fund includes BTC, ETH, XRP, SOL, and ADA.

Regarding CBDCs, the US House of Representatives has voted to merge the Anti-CBDC bill into the CLARITY crypto regulation bill, rather than keeping it separate. Previously, this bill was attached to defense spending, but it is now being moved with CLARITY before being sent to the Senate. However, this move makes little difference, as the Senate's version of CLARITY already includes an anti-CBDC provision.

In terms of crypto market regulation, the US and UK are increasing their cooperation on crypto oversight, according to the Financial Times. UK Chancellor of the Exchequer Rachel Reeves and US Treasury Secretary Scott Bessent have held discussions with representatives from major banks and crypto companies like Coinbase, Ripple, Citi, and Circle. Ripple believes this collaboration could become a global model for crypto regulation, while also helping the UK develop into a hub for digital assets and innovation.

Other Key Crypto & Market Updates

DBS and Franklin Templeton have signed a memorandum of understanding with Ripple to develop a tokenized money market fund on the XRP Ledger blockchain, using the RLUSD stablecoin. The DBS digital exchange will list Franklin Templeton's sgBENJI token, allowing it to be swapped for RLUSD to be converted into a stable, yielding asset 24/7 and to reduce volatility risks. DBS is also considering accepting sgBENJI as collateral for loans, while Franklin Templeton will tokenize sgBENJI on the XRP Ledger to increase interoperability, enabling fast, low-cost, and 24/7 transactions.

Three Swiss banks, UBS, PostFinance, and Sygnum Bank, have completed their first official payment transaction using bank deposits on the public Ethereum blockchain. The trial used "deposit tokens," which are bank deposits converted into tokens that can be used for payments between banks. According to Sygnum, the key difference is that these tokens can move flexibly between multiple banks, unlike internal systems like JPMorgan's.

Next Technology, China's largest Bitcoin holder, plans to sell $500 million in stock to purchase more BTC and fund business operations. The company currently holds 5,833 BTC (approximately $672 million), ranking 15th globally in terms of holdings. The trend of Bitcoin accumulation by publicly listed companies is growing strongly, with 190 companies now holding over 1 million BTC, which is more than 5% of the total supply.

Nvidia is facing new pressure in China as the Cyberspace Administration has requested that major companies like ByteDance and Alibaba stop purchasing its RTX Pro 6000D AI chips, which were specifically designed for the Chinese market. CEO Jensen Huang expressed disappointment but acknowledged that the issue is a political one between the US and China. Previously, even though the US allowed Nvidia to sell its H20 chips to China on the condition that 15% of the revenue be paid to the US government, China has now banned the company's AI chips. In addition, the Chinese regulatory agency has opened an antitrust investigation related to Nvidia's acquisition of Mellanox, increasing the business challenges in this market.

Forward Industries has registered an ATM equity offering program of up to $4 billion to raise flexible capital, with Cantor Fitzgerald acting as the selling agent. The funds will be used for general purposes such as working capital, growth, and specifically to expand its Solana treasury. Forward Industries currently leads the Solana treasury companies with $1.6 billion in SOL holdings.

Hex Trust has integrated custody and staking for stETH. The solution allows institutions to stake ETH and manage stETH directly on the platform, earning staking rewards without needing their own infrastructure.

The UK's FCA plans to relax regulations for crypto companies compared to banks and investment platforms, but will tighten rules around risks like cyberattacks. Some legal issues remain unresolved, and crypto is expected to be brought into a full regulatory framework from 2026.

BitGo has been granted a license by BaFin to expand into regulated crypto trading, in addition to its previous MiCA license. From its Frankfurt headquarters, the company can offer OTC trading, an electronic platform, and integrated cold storage custody services. This model allows institutions like pension funds and asset managers to trade, custody, and settle in a single system, reducing the need to open multiple accounts.

Bullish, the parent company of CoinDesk, has received a BitLicense from the NYDFS, which allows it to provide spot trading and crypto custody services in New York. This is one of the strictest licenses in the US, affirming its commitment to compliance after its August IPO. Bullish becomes the second publicly listed crypto exchange in the US, after Coinbase.

Metaplanet has formed two subsidiaries, Bitcoin Japan Inc. and Metaplanet Income Corp., to expand its Bitcoin-related operations. Bitcoin Japan Inc. in Tokyo will manage media, conferences, Bitcoin Magazine Japan, and the bitcoin.jp domain, while Metaplanet Income Corp., based in Miami, US, will develop Bitcoin-related financial products, including derivatives.

Sources

• Bloomberg
• CoinDesk
• U.S. Treasury
• TradingView
• Reuters
• SEC
• FED
• White House Press Office
• The New York Times
• Polkadot Official Blog
• Tether Transparency Report
• Ethereum Foundation
• Bitmine Immersion Technologies Investor Relations
• PayPal Official Announcements
• LSE Official Announcements
• Metaplannet
• Coindesk

Disclaimer

This article is for informational purposes only and should not be considered financial advice. Please do your own research before making investment decisions.