[Analysis] "Rate-cut hopes fade…crypto market enters a price repricing phase"

As expectations for global interest-rate cuts have weakened, analysis suggests the virtual asset (cryptocurrency) market has entered a new phase of price reshuffling.

On the 27th (Korea time), Chloe, a researcher at HTX Research, said in a report that the market environment has shifted "from 'FX- and expectations-driven risk appetite' to 'the burden stemming from higher-for-longer rates, energy shocks and shrinking liquidity.'"

Chloe explained: "While Jerome Powell, chair of the U.S. Federal Reserve (Fed), has left the door open to rate cuts within the year, he also made it clear that the Fed will not pivot to easing in the absence of sufficient confidence that inflation is slowing," adding that "this could weaken investment strategies in the market that have priced in 'pre-emptive rate cuts.'"

Rising tensions in the Middle East are also a headwind for virtual assets. Chloe said, "Higher energy prices limit households’ and institutions’ capacity to invest in risk assets and could prolong the high-rate environment."

Such shifts could also deepen polarization among assets within the virtual asset market. Chloe said, "In a phase of contracting liquidity, high-risk assets and projects lacking meaningful cash flow may come under relatively greater pressure," adding that "the market’s core is no longer the distinction between risk assets and safe-haven assets, but 'liquidity priority.'"