The Fed And ETF Listing Standards: Web3 Thoughts Of The Week

While the Fed rate cuts dominated discussions this week, Web3 also looked at some new developments with ETFs

Did the Fed cut enough?

“Markets are on edge this week as investors await the outcome of the most important FOMC meeting of 2025. Some analysts expect that a 25bps cut is already priced in and won’t immediately move the needle on asset prices, while others see a deeper cut of 50bps as a warning sign that the economy is in a worse shape than investors have been led to believe.”

“Yet it’s not the short-term market reaction that matters – it’s the fact that resuming the cutting cycle begins to unlock the $7.2 trillion sitting in money market funds, as well as the trillions tied up in outstanding mortgage debt.”

“Currently, nearly 80% of US mortgages are locked in at interest rates below 5%, so naturally, homeowners have had little interest in refinancing. Lowering rates will finally bring back the circulation of credit and liquidity that have been missing from the market all year.”

“Money is like gravity – it is always seeking yield. So, assuming the Fed restarts its rate-cutting cycle tomorrow, we can expect liquidity to flow into alternative yield-generating investments – and that means on-chain options in decentralized finance (DeFi) and real-world assets (RWAs).”

“The lower the yield on money market funds, the more likely investors are to explore opportunities to achieve higher returns. Stablecoins are a potential winner here, as they are increasingly being integrated into the global financial system. We’re about to enter an exciting time for DeFi.”

– Kevin Rusher, founder, RAAC

“The Fed’s rate cut is quite an important factor for the market. On the one hand, this is a positive development for the financial and crypto markets. Cheaper money pushes the quotes higher and higher.”

“However, trees cannot grow forever. The more we observe the absence of a significant and profound correction in global markets, the stronger and more drastic it will likely become in the future.”

“On the other hand, if we analyze the historical beginning of the Fed rate cut cycle, we can see that in the past, the rate cut cycle was a little late when the economy was already in recession. And then there was a significant correction in prices in the financial markets.”

“Currently, the Fed should be cautious about the dynamics of the interest rate, as the US dollar index DXY is increasingly losing ground in the global stock market. The dynamics of the EUR/USD currency pair will soon overcome the psychological level of 1.2 from the bottom up. This may cause a wave of closing long positions in the US dollar and redirect dollar flows to the most risky assets, including cryptocurrencies.”

“As long as liquidity prevails in the markets, the cryptocurrency market will feel quite confident. We will soon see new historical quotes for BTC, which will also support other coins. In addition, the approval of all new altcoin ETFs will also boost inflows into some cryptocurrencies soon.”

– Sergei Gorev, head of risk, YouHodler

“The US central bank has little room for hesitation. The labor market is losing momentum, unemployment is at a four-year high, and wage growth is easing. A 25-basis-point trim would leave policy trailing the reality on the ground.”

“Markets are conditioned for caution, but the economy demands something bolder. A half-point cut would reinforce consumer confidence and business investment at a time when trade frictions and rising input costs are already weighing on activity.”

“Inflation is no longer the overriding threat. The greater risk is a loss of growth momentum. The Fed’s dual mandate—price stability and maximum employment—requires decisive action when one side of the equation weakens.”

 “In 2021, the central bank misread the persistence of inflation, holding rates near zero while prices surged. Policymakers assured the public it was ‘transitory,’ only to scramble with aggressive hikes later. That delayed response forced steeper tightening and rattled both markets and households.

“History teaches us that waiting for perfect data can be costly.”

“The Fed has an opportunity to demonstrate leadership. A half-point cut now would not be reckless. It would be a strategic step to protect growth and safeguard jobs.”

“A larger cut this week would send that signal and help secure the expansion.”

– Nigel Green, deVere Group CEO

“Rate cuts are overwhelmingly positive in the short term for crypto. They act like oxygen: suddenly, there’s more capital circulating, and risk-on bets like early-stage crypto projects get the biggest lift. Think of a rate cut as the mouth that blows the bubble blowing a bit harder.”

“But there’s a bigger strategic layer here, too. The current administration knows what it’s doing: make fiat cheaper, ensure it flows seamlessly via USD-pegged stablecoins, and you expand U.S. monetary reach globally. In effect, you strengthen dollar dominance while tightening the state-level economic noose on rivals, and you do it through crypto rails.”

“For investors, that means two things in the short term: expect bullish price action, but also pay attention to how fast capital is flowing into risky assets, especially early-stage projects. The medium-to-long term question is how sustainable that inflow is once the geopolitical and monetary strategy behind it comes into sharper focus.”

– Dylan Dewdney, co-founder and CEO of Kuvi.ai

“The cut itself is obviously supportive for risk assets, and crypto sits at the far end of that spectrum. When the cost of capital comes down, the hurdle rate for owning Bitcoin gets lower, and it often coincides with a softer dollar. Both are natural tailwinds.”

‘But the real story is not just that the Fed cut rates. It is the context around why they cut. If the Fed is easing into strength, with inflation cooling and growth still holding, then crypto usually performs very well because liquidity is expanding. If it is seen as a response to weakening data, you can get the opposite effect: a relief rally that quickly fades, with markets chopping sideways until confidence rebuilds.”

“In the near term, there are a few things investors should keep an eye on. Real yields are arguably the most important driver for Bitcoin, more so than the nominal policy rate, and if they continue drifting lower, it will be hard to fade crypto strength. The dollar is another one. A softer dollar tends to send global capital further out on the risk curve, and we have already seen how tightly Bitcoin trades against DXY.”

“Beyond that, the microstructure matters: ETF inflows, the futures basis, and stablecoin issuance all tell you whether demand is healthy or not. Spot ETF creations, in particular, are a clean signal for new capital coming into the system.”

“For treasuries and funds that actually have to allocate, the cut also changes the calculus on credit. Cash yields come down, but terms for structured lending into Bitcoin improve. This is where treasuries should be paying attention. The opportunity is not just directional BTC exposure. It is the ability to borrow or lend with capped obligations at cheaper rates, using structures that do not require margin calls. That is a major shift compared with the past two years of high-rate pressure.”

“The way I would frame it is: rate cuts do not guarantee a straight line up for Bitcoin, but they do open the door for risk appetite to re-enter. If real yields are falling, the dollar is soft, and ETF demand continues, then the bias is higher. If growth fears dominate, you will probably see a period of chop. Either way, the backdrop has turned from headwind to tailwind, and that is what matters for investors.”

– Sid Sridhar, founder and CEO of BIMA Labs

SEC’s new ETF listing standards welcomed

“The SEC’s new listing standards for crypto ETFs couldn’t have come at a better time, as the Federal Reserve restarted its rate-cutting cycle. Over the next few weeks, we could see a slew of altcoin ETF launches as a result, just in time for investors to rotate out of lower-risk investments like money market funds in search of higher returns.”

“This regulatory milestone is a testament to the increasing maturity of the digital asset ecosystem and its participants, and shows how far crypto has come in the last three years. It’s a confirmation that hard work and perseverance pay off over the long term, and will continue to do so, regardless of the market cycles.”

– Mangirdas Ptašinskas, head of marketing and community at Galxe

“Instead of forcing every crypto ETF through that clunky, one-off approval slog, exchanges now get a clear path. That’s a win if you’re tired of waiting years for products to hit the market. It also signals that regulators see crypto products as normal enough to standardize, which is a progressive step forward. Once you’ve got that baseline, it’s way easier for permissionless activity like margin trading, lending to thrive around the edges. If you’re a builder, it’s less red tape. If you’re a trader, you get more instruments to play with and, yeah, probably tighter spreads too.”

– Sky, founder of LIKWID

“From my point of view, the SEC’s adoption of a standardized process for crypto ETF listings marks a meaningful shift in how exchange-traded products linked to digital assets may come to market. By moving away from a case-by-case approval framework, exchanges gain a clearer, more predictable route for introducing new products. This change could shorten timelines, reduce compliance costs, and lower uncertainty for issuers and market participants.”

“A standardized listing pathway also creates a more stable foundation on which ancillary infrastructure can develop. Services such as institutional lending, margin facilities, and derivatives tied to tokenized equities stand to benefit from an environment where underlying exchange-traded products are listed under consistent criteria. With greater transparency and procedural uniformity, liquidity providers and clearing firms can more confidently support these instruments.”

– Hedy Wang, co-founder and CEO, Block Street