FOMC Today: Effect on Crypto Altcoins & How I'm Preparing
🎯 Summary
Podcast Summary: FOMC Today: Effect on Crypto Altcoins & How I’m Preparing
This 61-minute podcast episode, hosted by Deasy and featuring Josh and TJ, centered on analyzing the immediate and future impact of the upcoming Federal Open Market Committee (FOMC) meeting on the cryptocurrency markets, particularly Bitcoin and altcoins, while also discussing current market positioning and macro indicators.
1. Focus Area
The primary focus was the Federal Open Market Committee (FOMC) meeting outcome (interest rate decisions and Powell’s commentary) and its direct implications for crypto market volatility, altcoin performance, and overall macro risk sentiment. Secondary themes included specific altcoin analysis (notably AERO/Drum Finance), technical analysis of Bitcoin and Ethereum, and the role of monetary supply (M2) as a macro indicator for crypto direction.
2. Key Technical Insights
- Ethereum Range-Bound Stagnation: Ethereum has been stuck in an unusually tight trading range (around $2480 to $2680) for months, suggesting a significant “Bollinger Band” squeeze, which implies an impending, potentially explosive move once the range breaks.
- Bitcoin Volatility Anomaly: Bitcoin recently printed 12 consecutive red one-hour candles, a pattern not seen in half a decade (since 2019), highlighting extreme short-term selling pressure or market manipulation around key times (like the 9:30 AM market open).
- Altcoin Dispersion: Despite Bitcoin and Ethereum being flat, the top 300 altcoins showed massive dispersion, with some tokens like AERO surging significantly, indicating that capital rotation and alpha generation are happening rapidly within specific sectors.
3. Market/Investment Angle
- FOMC Focus: The Dot Plot: Traders are less concerned with the expected rate hold and are intensely focused on the Dot Plot—the Fed’s projection for future rate cuts. Fewer projected cuts (a hawkish dot plot) would reinforce the “higher-for-longer” narrative, likely pressuring risk assets like Bitcoin.
- Wage Growth as Alt Season Catalyst: The hosts strongly asserted that true alt season is contingent upon significant wage growth outpacing inflation. Without increased retail spending power, capital cannot flow sufficiently into speculative assets.
- AERO Accumulation Thesis: AERO (Drum Finance) was highlighted as a strong accumulation target due to its role as the “liquidity hub for Base,” the Ethereum L2 ecosystem heavily backed by Coinbase. The hosts emphasized the benefit of earning yield in DeFi protocols like AERO’s pools regardless of market direction.
4. Notable Companies/People
- Jerome Powell (“Drone Powell”): Central figure whose press conference following the FOMC decision is critical for market direction.
- AERO (Drum Finance): Highlighted as the top gainer and a key investment focus due to its integral role in the Coinbase/Base ecosystem.
- Coinbase: Mentioned as the primary backer and beneficiary of the Base L2, which currently lacks its own L1 or native token.
- M2 Money Supply: Referenced via an external analyst’s commentary, stressing its use as a directional macro indicator for Bitcoin, not a precise price predictor.
5. Regulatory/Policy Discussion
The discussion touched on the political pressure surrounding the Fed, noting Donald Trump’s public demands for lower borrowing costs. More broadly, the hosts discussed the increasing concern among US treasury officials regarding currency manipulation by foreign adversaries, which impacts global macro stability and, by extension, risk assets.
6. Future Implications
The conversation suggests the market is at a critical juncture:
- Macro Decoupling: Josh predicted that this current cycle might be the last one where Bitcoin trades in direct correlation with the S&P 500 (SPX), implying that crypto may begin to decouple or develop its own distinct macro drivers in the next cycle.
- Rate Cut Dependency: The immediate future of crypto hinges on the Fed’s willingness to cut rates, which the hosts believe is necessary to reignite wage growth and subsequently fuel an alt season.
7. Target Audience
This podcast is most valuable for Active Crypto Traders, DeFi Participants, and Macro-Aware Crypto Investors who need actionable insights on how central bank policy and high-level economic data (like the Dot Plot and wage reports) translate into short-term trading strategies and long-term portfolio positioning within the crypto ecosystem.
🏢 Companies Mentioned
💬 Key Insights
"This is actually—you know, there are two camps people argue about this. Me and Johnny would argue about this for like 45 minutes before every stream back in the day. But with Cardano staking, it's still in your wallet. You can go trade, you can put in some DeFi, whatever's in your wallet is staking. You don't have to lock it up by any means, and you get paid every five days on Cardano."
"You can buy the bottoms of these, then you get in with the billionaires, and you know, they pump it up with Wintermute. But that's a hard game to play. You never know when they're going to be done trying to use you as excellent liquidity."
"It's good for DeFi. It's good to move things forward, but it's also the—the beginning of how they take control back and how they, you know, get custody through—it's how they could steal it if they wanted to do a nice accurate degree gold compensation."
"This is essentially a CBDC, you know, just not issued by the Fed."
"Stablecoin regulations are huge catalysts for the 2025 crypto market cycle. Full congressional approval may make stablecoins part of the US financial infrastructure if issuers start holding large amounts of Treasuries—this is the key thing—large amounts of US debt, because our debt keeps increasing because we keep devaluing the dollar."
"The GENIUS Act can make stablecoins part of the US financial infrastructure."