2026 Fed Cuts Will Be ‘key Catalyst’ For Retail’s Return To Crypto

Investors will be more excited about crypto if the Fed continues cutting rates in 2026, says a crypto analyst.

The aggressiveness of Federal Reserve rate cuts in 2026 will determine whether retail investors return to the crypto market next year, according to a crypto analyst.

But there are doubts about how likely the Fed is to continue cutting, after already making three reductions in 2025.

Clear Street managing director Owen Lau told CNBC on Tuesday that Fed rate decisions are “one of the key catalysts for the crypto space in 2026.”

“Retail will be more excited to get into crypto, institutions will be more excited to get into crypto,” Lau said.

Interest rate cuts are typically bullish for crypto assets, as traditional investments like bonds and term deposits become less attractive, pushing investors toward riskier assets such as Bitcoin (BTC) and other cryptocurrencies as they look for higher returns.

The Fed’s December minutes, released on Tuesday, indicate that the central bank is open to adjusting rates next year to align with broader economic goals.

“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” the minutes said.

However, some data shows the market is skeptical whether the Fed will continue cutting rates in the first months of the year, according to crypto prediction platform Polymarket.

Polymarket’s data shows just a 15% probability of a rate cut in January, while confidence is higher for a rate cut in March, with a 52% chance.

Source: CoinTelegraph