Kevin O'Leary, the entrepreneur and investor known as "Mr. Wonderful," is skeptical that the U.S. Federal Reserve will cut interest rates in December, a move that is generally considered favorable for cryptocurrencies. However, O'Leary doesn't believe that the Fed holding steady on interest rates will negatively affect Bitcoin's price.
In an interview on Tuesday, O'Leary stated, "I don't actually think the Fed's gonna cut in December,". He emphasized that even without a rate cut, Bitcoin will be fine. O'Leary also mentioned that his investment strategy isn't based on the expectation of a rate cut.
O'Leary outlined several reasons why the Federal Reserve might choose not to cut rates. He pointed to persistent inflation as a key factor, noting that the annual inflation rate rose to 3% in September, marking the highest level since January. He also highlighted the Fed's dual mandate of full employment and stable prices, suggesting that tariffs and rising input costs are beginning to have an impact.
Despite O'Leary's skepticism, market participants are largely anticipating a rate cut in December. According to the CME's FedWatch Tool, there's an 89.2% probability of a rate cut. Crypto traders often view Fed rate cuts as a positive catalyst for riskier assets like cryptocurrencies, as investors tend to move away from bonds and term deposits when they become less attractive. However, some analysts are concerned that an unexpected decision by the Fed could negatively impact Bitcoin's price and the broader crypto market.
O'Leary doesn't foresee a significant drop in Bitcoin's price, even if the Fed decides against a rate cut. He believes that Bitcoin has "found a level for now" and anticipates that its price will "sort of drift within 5% of where it is now, in either direction,". He also stated that he doesn't see "a lot of upside catalyst" at the moment.
According to CoinMarketCap, Bitcoin has declined by 17.35% over the past 30 days and is currently trading at $91,440. Market expectations for a December rate cut have fluctuated considerably in recent weeks.
O'Leary's current stance is a notable shift from his earlier views on Bitcoin. He once referred to it as "junk," but now considers crypto assets to represent almost 20% of his portfolio. This change reflects a growing acceptance of Bitcoin as a legitimate investment asset. O'Leary has even projected that the price of Bitcoin could reach $250,000, based on wider adoption and acceptance.
