Crypto Rallies on Fed Rate Cut, AVAX & HYPE Lead Gains

The Federal Reserve’s widely anticipated quarter-point rate cut provided the catalyst for a broad-based cryptocurrency rally, with digital assets posting significant gains across the board. The Fed’s decision to lower the federal funds rate to a range of 4.25% to 4.50% improved overall risk sentiment, though analysts noted that the move had been largely priced into markets for months. Bitcoin maintained its position above $117,000 with a modest 0.3% gain, while Ethereum posted a 2.1% increase to $4,588, demonstrating relative stability compared to more volatile altcoins.

According to Nic Puckrin, founder of The Coin Bureau, “it’s the signal, not the size, that counts,” noting that the 25 basis point cut shows the Fed is finally easing monetary policy after months of concerning inflation and weak labor data. This shift in monetary policy stance created a favorable environment for risk assets, including cryptocurrencies, though experts cautioned that the initial euphoria might be short-lived given how thoroughly the rate cut had been anticipated by market participants.

Avalanche’s AVAX token emerged as the standout performer, rocketing 10.1% to $32.59 according to CoinGecko data. This outperformance was driven by project-specific developments rather than the broader macro environment. Min Jung, senior analyst at quantitative trading firm Presto, told Decrypt that “while the Fed’s rate cut buoyed broader risk sentiment, AVAX’s outperformance seems driven by Avalanche’s announcement of a $1 billion Digital Asset Treasury plan.”

The Avalanche Foundation is in advanced talks to raise $1 billion through a Nasdaq-listed firm backed by Hivemind and a Dragonfly-sponsored SPAC, with proceeds earmarked for discounted AVAX buybacks, according to the Financial Times. This substantial treasury development was complemented by Bitwise’s filing for an AVAX ETF on Monday, which would utilize Coinbase to custody the digital assets. These moves significantly enhance AVAX’s institutional adoption prospects and provide fundamental support for the token’s recent price appreciation.

Hyperliquid’s HYPE token jumped 7.2% to $58.43, with the project’s USDH stablecoin attracting significant institutional interest. Ganesh Mahidhar, Investment Professional at Further Ventures, told Decrypt that “USDH is attracting liquidity across the board from many institutions,” highlighting the unique design of Hyperliquid’s perpetual trading platform where “custody is not with the exchange but the UX is just as smooth as a centralized exchange.”

This institutional traction for USDH comes at a time when stablecoins are increasingly becoming the entry point for traditional finance participants entering the crypto space. The combination of robust security through non-custodial design and user experience comparable to centralized exchanges has positioned Hyperliquid favorably among institutional players seeking exposure to decentralized finance infrastructure.

The rally extended across major altcoins, with Dogecoin advancing 5.4% to $0.27, Solana climbing 4.5% to $244, and Cardano rising 4.3% to $0.90. This broad-based strength suggests improved sentiment across the cryptocurrency ecosystem beyond just the largest assets. However, experts warned that altcoins remain more exposed to volatility than Bitcoin, particularly as the initial euphoria from the Fed decision fades.

Jung noted that the rally could “sustain in the near term as the biggest macro risk event—the FOMC—has now been cleared,” though with the cut “largely digested,” future moves will depend on “headlines and project-specific catalysts.” Puckrin added that “hope is high and there’s a big chance of a ‘sell the news’ pullback,” with meme coins most vulnerable to “pump fast and collapse fast” volatility. This caution reflects the understanding that while macro conditions have improved, cryptocurrency markets remain highly sensitive to project-specific developments and sentiment shifts.