American entrepreneur and investor Kevin O'Leary has pushed back against speculation that the US Federal Reserve will cut rates of interest in December – a move that sometimes signals a positive outlook for cryptocurrencies.
However, O'Leary doesn’t imagine that a Fed rate hike could have a negative impact on the worth of Bitcoin (BTC).
“I actually don’t think the Fed will cut rates in December,” O’Leary, also referred to as “Mr. Wonderful,” said in an interview with Cointelegraph on Tuesday, emphasizing that it “will make no difference to Bitcoin.”
Mr. Wonderful will not be tipping Bitcoin to rise greater than 5%
“I don't invest that way. I don't invest as if the Fed goes to chop rates. So I just don't see it. I believe there are loads of the reason why they won’t try this,” O'Leary said.
O'Leary identified that there was “loads of inflation within the system.” Annual inflation rose to three% in September, the best since January.
“It's a dual mandate: full employment and inflation. And so tariffs begin to take hold and create costs,” O'Leary said. Despite these concerns, market participants place an 89.2% probability of a Fed rate cut in December, based on the CME's FedWatch tool.
The market believes the probability of a Fed rate cut in December is 89.2%. Source: CME Group
Crypto traders typically view Fed rate of interest cuts as bullish for riskier assets like crypto, as investors are inclined to move away from bonds and term deposits, which develop into less lucrative.
However, some fear that an unexpected rate of interest decision from the Fed could have a negative impact on the worth of Bitcoin and the complete crypto market.
However, O'Leary doesn't expect that to occur.
O'Leary said that Bitcoin has found “a level for now” and that he doesn't expect the worth to fall much further. “I believe it’ll fluctuate inside 5% of where it’s now in either direction, but I don't see much of an upside trend,” O'Leary said.
According to CoinMarketCap, Bitcoin is currently trading at $91,440.
Fed rate of interest volatility is high ahead of the choice
Market expectations for a rate cut in December were far less optimistic just just a few weeks ago.
On November 19, the probability of a rate cut on the December meeting fell to 33%, just weeks after investors estimated the probability of a December rate cut at about 67% in the primary week of November.
But just just a few days later, on November 21, the probability almost doubled to 69.40% after New York Fed President John Williams made dovish comments, saying the Fed could cut rates of interest “within the near term” without jeopardizing its inflation goal.
Bloomberg analyst Joe Weisenthal said for this reason the percentages have “increased massively.”
After the primary rate cut of 2025 in September and one other cut in November, markets largely expected the Federal Reserve to further ease monetary policy through the top of the 12 months.
