A simmering crypto rally boiled over into a full-blown frenzy during late US trading hours on Tuesday, after Treasury Secretary Scott Bessent dropped a bombshell suggestion that sent shockwaves through the market: the Federal Reserve should consider an aggressive 50 basis point rate cut.
His words acted like rocket fuel for risk assets, unleashing a powerful new leg higher for altcoins while leaving Bitcoin watching from the sidelines.
The market-moving comments came during an interview on Fox News, where Bessent openly questioned the central bank’s next move.
“The real thing now to think about is should we get a 50 basis-point rate cut in September,” Bessent stated. He went further, criticizing the central bank’s information-gathering process, adding that the Fed could have cut rates as early as June if it had been given accurate data, which he described as a “foundational issue.”
The Bessent fffect: unleashing the bulls
While markets had already almost fully baked in a standard 25 basis point cut for September, the mere mention of a 50-point move from a figure of Bessent’s stature completely reset expectations.
Although the Treasury Secretary is not a member of the Federal Reserve, his words carry immense weight.
President Trump has tasked him with leading the search for a replacement for current Fed Chair Jerome Powell, making his views a potential preview of the central bank’s future policy direction.
The reaction was immediate and fierce. Ether (ETH), already enjoying a positive day, blasted higher, surging nearly 9% over the past 24 hours to trade above $4,600 for the first time since the heady days of November 2021.
An altcoin affair
This was emphatically an altcoin-driven rally. Other major cryptocurrencies joined the surge, with Cardano (ADA), Solana (SOL), and Litecoin (LTC) each rocketing ahead by about 8%. XRP also caught a bid, rising 3.5%.
This flood of capital into digital assets mirrored a rally in equity markets, which climbed more than 1%, while the dollar weakened against all major currencies.
Conspicuously absent from the party were the Bitcoin bulls.
The world’s largest cryptocurrency remained largely unchanged, hovering around the $120,000 mark, suggesting traders were selectively deploying capital into assets perceived to have more immediate upside in a “risk-on” environment.
The stage for this dramatic late-day surge had been set earlier on Tuesday morning. The initial spark for the rally came after new data showed US consumer prices in July rising roughly in line with economist estimates, providing a sigh of relief.
But it was Bessent’s unexpected words that turned that sigh of relief into a roar of speculative excitement.
