TLDR:
- Markets see 88% odds of a September Fed cut as pivot bets become the base case.
- Goldman Sachs projects three consecutive rate cuts starting in September.
- Crypto traders eye liquidity rotation from safer assets into altcoins.
- January may bring a pause, but pivot momentum is already fueling risk appetite.
Markets are no longer debating a Federal Reserve pivot. They are pricing it in. Investors now see three rate cuts coming in 2025, with the first highly likely in September. These expectations are reshaping the outlook for risk assets, and crypto is right in the middle of it. With cheaper capital ahead, traders are already preparing for a potential liquidity wave.
Markets Push Fed Pivot Into Base Case
Wise Advice, a market commentator on X, reported that the odds of three rate cuts in 2025 now stand at 46.4%.
CME FedWatch shows an 88% chance of a September cut. Historical data suggests these odds hold weight once they settle between meetings. Polymarket prediction bettors also back this outlook, with 85% favoring a September move.
🚨 FED PIVOT Incoming?
Markets now give a 46.4% chance that the Fed cuts rates 3 times in 2025 and have fully priced in those cuts by January.
The pivot is no longer a question, it’s becoming the base case.
Here’s why that matters (especially for crypto) 🧵 pic.twitter.com/3XSqUTziTP
— Wise Advice (@wiseadvicesumit) August 5, 2025
This alignment between institutional traders and retail prediction markets is rare. It signals that the Fed’s shift is no longer speculation. Instead, it has become a central expectation driving market positioning.
According to Wise Advice, Goldman Sachs expects three consecutive 25-basis-point cuts in September, October, and December. Analysts also warned that a 50-basis-point move could happen if unemployment spikes. Markets have now priced in this path, with rates potentially dropping from 4.25% in September to 3.50% by December.
That would mark a full percentage point cut in just seven months. Traders view this as a green light for risk-taking, with crypto seen as a primary beneficiary of fresh liquidity.
Liquidity Rotation Fuels Crypto Speculation
Lower rates historically drive capital out of safe assets and into riskier markets. Crypto traders see this as the setup for a broad liquidity rotation. Wise Advice stressed that altcoins tend to thrive under these conditions, with rate cuts often sparking renewed demand across the sector.
However, the market is not expecting a straight line. While cuts appear locked in for the next three meetings, January could bring a pause. This pause is unlikely to derail the trend but may slow the pace of inflows into risk assets.
For now, the pivot narrative has already started to impact sentiment. Traders are positioning ahead of September in anticipation of fresh capital moving into crypto. If the Fed follows through, the next several months could reshape the risk landscape.
Markets are now watching one thing: how fast the liquidity hits. And in crypto, timing often decides everything.
