**Crypto News Update: The Impact of FED’s Interest Rate Cuts on Bitcoin and Altcoins**
Recent interest rate reductions by the Federal Reserve have sparked a significant uptick in Bitcoin’s (BTC) value, yet this monetary policy shift has adversely affected two notable stablecoin issuers. According to a report from Bluechip, shared on its X account, Tether, the issuer of USDT, has faced an annual revenue loss of $488 million for every 50 basis points the FED cuts rates. Similarly, Circle, which issues USDC, has seen a $144 million decrease in its annual revenue.
Last week, the Federal Reserve made an unexpected move by lowering interest rates by 50 basis points. This decision has invigorated risk assets—especially Bitcoin—leading to a surge in its price. However, the implications of these cuts extend beyond BTC, as they have also negatively impacted the earnings of stablecoin issuers like Tether and Circle.
Bluechip, an independent agency focused on stablecoin assessments, explained that declining interest rates result in lower yields for stablecoin issuers compared to U.S. Treasury bonds. Consequently, these issuers may be compelled to pursue riskier investments in an attempt to compensate for their dwindling income.
For every 50 basis point reduction:
– **@Tether_to** experiences a loss of $488 million.
– **@Circle** incurs a loss of $144 million in annualized revenue.
As the Federal Reserve continues to lower rates, stablecoin issuers find themselves earning less from U.S. Treasury bills, potentially driving them toward higher-risk investments to recover lost revenue.
*Note: This article does not constitute investment advice. To explore over 300 cryptocurrencies, consider registering with Binance exchange for a 20% commission discount using this link!*
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