Fed rate decision incoming: Would a surprise cut send Bitcoin to $140K?

Key Points

1. A surprise Fed rate cut below the current 4% could lower returns on fixed income, pushing traders toward higher-yielding alternatives like Bitcoin.

2. The CME FedWatch tool indicates a 97% probability that the Fed will maintain current interest rates, making a rate cut unexpected.

3. The US economy grew at a 3% annualized rate in Q2, and the probability of a 2025 recession has dropped to 17%, reducing inflationary pressures.

4. A rate cut to 3.75% could shift investment away from the $25.4 trillion bond market, making risk assets like Bitcoin more attractive.

5. Bitcoin reaching $140,000 would imply a $2.78 trillion market cap, still significantly below gold's $22.5 trillion valuation.