3 Major Crypto Assets Price Predictions: BTC, ETH, and XRP Recover Overnight Losses as The Federal Reserve (FED) Decision Faces Significant Threats to Its "Authority"

Major cryptocurrencies have reversed their overnight decline, with analysts stating that the Federal Reserve's decision on Wednesday highlights President Trump's growing influence over the Central Bank, strengthening the long-term bullish case for cryptocurrencies. The Fed kept the benchmark interest rate unchanged at 4.25% as expected, and Chairman Powell downplayed the possibility of a rate cut in September, emphasizing that the central bank's focus is on controlling inflation, rather than the government borrowing or mortgage costs that Trump wishes to lower. Powell's remarks shook the cryptocurrency market, causing Bitcoin (BTC) to drop to $116,000, with Ethereum (ETH) and Ripple (XRP) also following suit, shaking the leverage bets in the futures market. However, these losses have already been reversed.

Crypto Assets Market: From Panic to Rebound

(Source: Gate)

Today (31) during the European session, the trading price of BTC is $118,560, while the trading prices of XRP and ETH are $3.1630 and $3,858 respectively. The broader market indicator CoinDesk 80 Index hovers around 915 points, rising by 0.8% in the last 24 hours.

The Independence of the Federal Reserve Faces Threats: Trump's Influence

Orbit Markets co-founder Jimmy Yang stated that the Federal Reserve's overnight decision exposes the threats to its independence. Although the central bank maintains stable interest rates, two policymakers—Federal Reserve Vice Chair for Supervision Michelle Bowman and Federal Reserve Governor Christopher Waller (both appointed by President Donald Trump)—hold differing opinions and support a rate cut.

Trump has repeatedly criticized Powell for maintaining high interest rates, leading to the loss of billions of dollars for the United States. Notably, Waller and Bowman have publicly advocated for rate cuts in recent weeks. Yang stated, "Due to the two officials appointed by Trump voting in favor of the rate cut last night, concerns about the independence of the Federal Reserve are growing; in the long run, this should strengthen the case for cryptocurrencies."

He added that since there will be no interest rate cuts in the short term, the market may continue to trade in a directionless environment, waiting for new catalysts—the release of the July Consumer Price Index. Yang pointed out: "In the coming months, after the tariffs take effect, the Consumer Price Index (CPI) may rise. Cryptocurrencies may initially be sold off along with broader risk assets. However, if inflation concerns persist, with the re-emergence of hedging effects, cryptocurrencies may rebound, especially Bitcoin."

Three, Concerns in the Bond Market: Long-term Inflation Factors

Greg Magadini, the head of derivatives at Amberdata, stated that despite the Federal Reserve's decision meeting expectations, concerns about the independence of the Federal Reserve still exist.

Magadini pointed out: "The biggest issue facing the bond market this year is the independence of the Federal Reserve. The decision on Wednesday helped the Federal Reserve defend its independence. However, if Powell is dismissed or interest rates are cut too early, I expect hard assets (especially Bitcoin) to rise significantly. Meanwhile, inflation and bonds may depreciate considerably."

Magadini explained that the bond market continues to factor in long-term inflation factors into prices, which weakens the rationale for Trump’s desire to quickly lower interest rates to ultra-low levels.

"Since Trump was elected, we have seen a significant rise in long-term bond yields. The 10-year and 30-year bond yields have risen from 15 basis points to 55 basis points, and the 2-year and 10-year treasury yields have increased from 5 basis points to 45 basis points. This means that the bond market continues to factor in long-term inflation into prices, especially considering that the 'real yields' have historically been positive... Should the inflation rate be maintained at the current level," said Magadini.

Conclusion:

The Federal Reserve's resolution and Powell's speech, although causing market fluctuations in the short term, saw the crypto assets market quickly regain its losses, demonstrating its resilience. However, the threat to the Federal Reserve's independence and Trump's influence over the Central Bank will be macro factors that the crypto assets market needs to continuously monitor in the future.