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  • ⚖️ First Fed cut since 2023. Market reacts.

⚖️ First Fed cut since 2023. Market reacts.

PLUS: First cut since 2023, muted BTC response, DBS–Ripple–Franklin team up on tokenization, and Hyperliquid hits new highs.

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Cryptopolitan News
September 18, 2025 • Estimated Reading Time: 9 minutes

The Federal just made the first rate cut of 2025. A reduction of 25 bps, with the new benchmark rate becoming 4.0-4.25%.

As we covered in the past, the move was widely anticipated. A weak job data, slower growth and weak inflation were the final triggers. Usually a rate cut makes alternative investments more lucrative for the investors, but this time the market had a mixed response.

A quick rewind:

  • The Fed hiked aggressively from March 2022 – July 2023, a total of 11 times to battle post covid inflation

  • 2024 saw a stagnant period, no cuts, leaving rates elevated at 4.25% - 4.50%

  • Traders were eyeing rate cuts, but the Fed had a cautious approach, until now.

So – Why cut now?

Powell pointed towards higher job risks as the key factor. The unemployment rate has increased to 4.3%, from 3.6% levels of 2022. Job creation has slowed and so has GDP growth, 1.5% in H1 2025 compared to 2.5% last year. Inflation is above target but the focus of the Fed is clearly now on employment.

Market reaction

  • Stocks: The Dow climbed 0.9%, buoyed by a burst of consumer optimism, while the Nasdaq fell 0.3% as tech names sank.

  • Dollar: Sank to the lowest level since Feb 2022.

  • Crypto: Bitcoin dipped under $115K twice but recovered to 117K. There were 105M in leveraged positions liquidated within half an hour which was a sign that traders were overextended. ETH also slipped to $4.49K.

 Why so muted?

Because markets saw it coming. the markets have already priced in a 25bps cut, so there's not much room for upside surprise. Futures trading volume jumped but spot demand is still soft, which can render the rally fragile.

What’s next?

  • The Fed signalled another 50bps in cuts by the end of 2025, but no a larger move of 50bps for now.

  • Traders seem divided: either stocks calm down and Bitcoin catches up, or BTC further lags until a new round of demand from spot arrives.

  • To the upside: a bullish inverse head-and-shoulders pattern is forming near $117K,  if this plays out price targets are up around $127.6K and perhaps even $142K.

🔎 Quick Explainer: Why rate cuts matter?

  • Lower borrowing costs: When interest rates are lower, companies can borrow more cheaply. That makes them more likely to grow, invest and hire workers.

  • Consumer spending: Households pay less on mortgages, credit cards and car loans, so they have more money to spend, supporting demand for goods and services.

  • Investment boost: Deeper low yields on safe assets (like Treasuries) force investors into riskier places such as stocks, crypto startups and real estate, creating more economic activity.

  • The Fed’s dual mandate: It is charged with trying to find the equilibrium between inflation and maximum employment. Lowering rates is the principal tool when job growth cools or unemployment goes up.

👀 Narratives we are watching

DBS, Franklin Templeton and Ripple have joined hands to put tokenised money market funds and stablecoins on a regulated platform together. Franklin Templeton’s sgBENJI (a tokenised short-term fund) will be alongside Ripple’s RLUSD stablecoin on DBS Digital Exchange, allowing institutions to move seamlessly between yield and stability without ever taking off from the platform.

This isn’t just another pilot. It’s one of the clearest indications that tokenisation + stablecoins = the new financial rails. Traders can collateralize loans with sgBENJI, trade RLUSD 24/7 and manage liquidity as they would in TradFi but faster and cheaper.

The takeaway? Big banks and old-line giants are no longer just experimenting, they’re building regulated tokenisation ecosystems.

 👀 Chart our analyst is watching

HYPE has a new ATH. Hyperliquid’s native token broke a new high, backed by $730 Million in trading volume.

A new BitGo listing served as fuel to fire, along with the recovery of peak open interest to $2.1 Billion, majority of it being on Hyperliquid’s own platform.

Nansen’s analysis on the positions:

Smart money and influencers are tilted on the Bullish side, but whale positions are balanced. Prediction markets on the other hand are favouring in the bullish scenario with a 70$ price target:

Up next: USDC makes up 85% of the stablecoin supply on Hyperliquid, and inflows coincide with the need to take positions or increase collateral. According to Messari analysis, USDC will retain this role, while USDH will not immediately become a collateral asset.

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🎭 Culture Corner

Déjà vu, 2008?

Google searches for “help with mortgage” have just surpassed levels seen during the 2008 housing crisis.

That’s a flashing sign of stress on households, even as stock markets and crypto test new highs. It shows how the cost-of-living squeeze and rising debt burdens are starting to bite into everyday life.

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