What’s Next for Crypto Market, DeFi, ENA post-50 bps Fed Rate Cut, per Arthur Hayes

Crypto billionaire Arthur Hayes revealed his post-50 bps Fed rate cut prediction for the crypto market, DeFi, and Ethena (ENA) on Tuesday. The broader crypto market is witnessing a fundamental shift as Bitcoin fell and the global crypto market slipped back under $4 trillion, but DeFi is finally seeing adoption.

Arthur Hayes Predicts 50 bps Fed Rate Cut

The sharp decline in the U.S. 2-year Treasury yield and weak labor jobs data signal a larger interest rate cut by the U.S. Federal Reserve in September, BitMEX co-founder Arthur Hayes predicted on September 9.

Moreover, the U.S. 10-year Treasury yield has slipped significantly after the Non-farm payrolls data came in at 22K,  significantly lower than 75K expectations. Weak labor market amid sticky inflation puts three Fed rate cuts on the table.

The CME FedWatch Tool shows more than 88% probability of a Fed rate cut of 25 bps by the FOMC this month. In addition, traders expect the Federal Reserve to make a total of 75 bps rate cuts this year, with odds of a 25 bps rate cut in December rising to 70%.

Crypto Market, DeFi, and ENA Price Prediction

Arthur Hayes predicted millions of capital inflow into the crypto market post-Fed rate cut. A 50 bps rate cut or a dovish outlook by the Fed Chair Jerome Powell could bring billions in inflows.

He pointed out that trillions in money market funds (MMF) will look for better yields after interest rate cuts. DeFi will see a massive inflow of this cash as the crypto market-traditional finance bridge grows.

Hayes highlighted Ethena staked USDE (sUSDe), which offers a 7% yield, to get massive inflow from institutions. The capital inflow will boost the synthetic dollar Ethena USDe (USDe) supply to surpass $20 billion from $12.98 billion currently.

In addition, he claims Ethena (ENA) to witness a huge rally, surpassing at least $1.50 in the coming months. At the time of writing, ENA price was trading at $0.792, up more than 4% over the last 24 hours. The trading volume has increased nearly 75% in the last 24 hours, indicating massive interest among traders.

Arthur Hayes spent 1.02 million USDC to purchase 1.34 million ENA in the past few hours. He holds a total of 4.45 million ENA worth 3.48 million.