Bitcoin News Today: Fed's 25-Point Cut Boosts Markets, But Ambiguous Guidance Sows Wider Uncertainty

The Federal Reserve's decision to cut interest rates by 25 basis points at its October meeting has drawn a measured response from Bridgewater Associates, one of the world's largest hedge funds. While the firm welcomed the reduction in borrowing costs, it expressed dissatisfaction with the central bank's forward guidance, which it viewed as insufficiently dovish. This nuanced stance reflects broader market uncertainty, as investors weigh the Fed's policy trajectory against evolving inflation dynamics and global economic risks, according to a Blockchain.News report.

The rate cut, the first in a potential series of easing measures, has already spurred significant capital flows into risk assets. Digital asset markets, in particular, have seen a surge in demand, with crypto investment products attracting $921 million in inflows last week, according to CoinShares, as Decrypt reported. Bitcoin dominated this rally, capturing nearly all of the inflows as Ethereum and altcoins saw outflows. Analysts attribute this shift to growing institutional adoption of crypto as a diversification tool, with long-term holders increasingly treating Bitcoin as a store of value amid low-rate environments.

Equity markets also signaled caution ahead of the Fed's decision. The S&P 500's $16 trillion rally has been accompanied by rising hedging costs, as investors lock in downside protection ahead of the FOMC meeting. This trend underscores persistent volatility, with cross-asset correlations—particularly between equities and cryptocurrencies—likely to intensify in the coming weeks. For instance, a 1% drop in the S&P 500 has historically corresponded to a 2–3% fluctuation in Bitcoin prices, a dynamic that could amplify market swings as the Fed's policy pivot unfolds, as that Blockchain.News report noted.

Global markets have similarly priced in the Fed's easing cycle. Taiwan's Taiex index, for example, surged 1.68% on Monday, driven by optimism over U.S.-China trade negotiations and expectations of further rate cuts. Tech stocks, including semiconductor giants like TSMC, benefited from investor bets on lower borrowing costs boosting high-growth sectors. Meanwhile, European banks like Barclays have shifted strategy, acquiring fintech platforms like Best Egg to capitalize on Main Street lending opportunities amid tighter Wall Street margins, Focus Taiwan reported.

Bridgewater's critique of the Fed's communication highlights a broader debate about policy clarity. While the 25-basis-point cut aligns with market expectations, the central bank's statement failed to commit to a clear path for future reductions. This ambiguity has led traders to scale back bets on additional cuts, with December meeting odds now hovering around 70% from earlier 90% levels. Such uncertainty has ripple effects, as seen in the recent performance of megacap tech stocks like Meta and Microsoft, which tumbled on concerns about AI spending and capital expenditure pressures, as Investing.com noted.

Looking ahead, the interplay between Fed policy and asset markets will remain critical. For crypto, the focus will be on whether the Fed's dovish pivot sustains inflows into Bitcoin and Ethereum, particularly as U.S. ETF launches loom. In equities, earnings season will test the resilience of the rally, with AI-driven sectors like semiconductors and cloud computing likely to outperform. Meanwhile, Bridgewater and other institutional players will continue to monitor inflation data and labor market trends, which could dictate the pace of future rate cuts—and the broader trajectory of global financial markets.