Crypto Surge On Fed Cut, Trump’s DeFi Details #CriptoNews

A New Rally

The crypto market surged after the U.S. Federal Reserve slashed interest rates by 50 basis points on Wednesday. Bitcoin
Bitcoin
spiked 7% on Thursday and Friday morning, surpassing $64,000. Ether followed with a 9% rise, while Solana
Solana
outpaced them both, soaring 12%. There were fears that a 50 bps rate cut could lead to apprehension in the market, as it could suggest that the Fed was more worried about the state of the economy than previously thought. However, the positive reaction to the news across asset classes suggests optimism that the Fed can achieve its long-awaited soft landing without tipping the economy into recession.

Before the rate announcement at 2 p.m. EST on Wednesday, an interesting dichotomy appeared between trader expectations. The CME FedWatch tool, which gauges sentiment from Fed Fund Futures pricing data, indicated a 55% likelihood of a 50 bps cut, while Polymarket, a prediction betting website that has become crypto’s breakout hit in 2024, estimated the probability at just 38%. In this instance, CME FedWatch proved to be more accurate.

The Trumps Venture Into DeFi

On Monday, Donald Trump unveiled World Liberty Financial (WLFI), a crypto venture spearheaded by his sons, Donald Jr. and Eric.

“We have to be at the top, no matter what we do. Crypto is one of those things we have to do, whether we like it or not,” declared Trump, streaming from Mar-a-Lago, his country club in Palm Beach, Florida. “If we don’t do it, China is going to do it. China is doing it anyway,” he added, apparently unaware that cryptocurrencies have been illegal in China since 2021.

While details were sparse, WLFI is reportedly built on DeFi lending giant Aave and involves stablecoins—tokens pegged to traditional currencies like the U.S. dollar. WLFI plans to launch a governance token, allowing holders voting rights akin to stockholders. The token allocation includes 63% for public sale, 17% for user rewards and 20% reserved for “team compensation,” covering advisors, hires and, of course, the Trump family. Read more.

Sources: Forbes Digital Assets, CoinGecko. Prices as of 4 p.m. on September 20, 2024.

Louisiana Breaks Ground On Crypto Payments

Louisiana has become the first U.S. state to accept cryptocurrency for government services. The state now allows payments in bitcoin, bitcoin lightning and USDC
USDC
with the first transaction processed on September 17 by the Department of Wildlife and Fisheries.

In partnership with Bead Pay, a crypto payment processor, Louisiana converts these digital payments into U.S. dollars before they hit state accounts. This move aligns with a broader wave of crypto policy initiatives sweeping the U.S., where 26 states introduced more than 80 crypto-related bills in January 2024 alone, following the SEC’s approval of several Bitcoin ETFs.

Elsewhere

Lawmakers Say Crypto Legislation Could Come By Year-End

Ex-Coinbase Workers Start Stablecoin Focused Crypto Exchange

Silvergate Capital Enters Bankruptcy After Crypto Bank’s Shutdown