Fed Support May Boost Cryptos Amid US Stock Market Downturn

Analysts believe that if the Federal Reserve increases liquidity during a major US stock market downturn, cryptocurrencies could benefit indirectly.

The US stock market has grown to about $75 trillion in value over the past five years, leading some analysts to suggest that policymakers may intervene during a severe sell-off.

Bitcoin (BTC) and other digital assets have historically responded positively to easier monetary conditions and stronger investor risk appetite, according to Bitget Wallet Chief Operating Officer Alvin Kan.

Kan stated, 'Once the Fed steps in, rate cuts, balance-sheet expansion, even targeted ETF purchases, crypto has historically entered a medium-to-long-term uptrend.'

However, analysts also note that persistent inflation could limit the Federal Reserve's ability to introduce additional monetary stimulus.