Retail interest in cryptocurrencies could rebound in 2026 if the US Federal Reserve continues to cut interest rates, according to market analysts.
Analysts say lower borrowing costs typically encourage investors to move back into risk assets such as digital currencies.
Clear Street managing director Owen Lau identified Federal Reserve policy as a major factor shaping crypto market behaviour next year.
Federal Reserve policy decisions will be one of the key catalysts for the crypto space in 2026.
Owen Lau said.
Retail will be more excited to get into crypto, institutions will be more excited to get into crypto.
Owen Lau stated.
Rate cuts generally reduce yields on bonds and savings products, making alternative assets more attractive to investors.
Cryptocurrencies often benefit during periods of monetary easing as liquidity conditions improve across markets.
Despite this view, traders remain uncertain about how aggressively the Federal Reserve will ease policy in 2026.
The central bank has already delivered three interest rate cuts of 25 basis points each during 2025.