As expectations for a rate cut by the U.S. Federal Reserve in September gain momentum, Arthur Hayes, co-founder of BitMEX, evaluates the potential implications for the cryptocurrency market and the Ethena (ENA) altcoin. Last week’s U.S. nonfarm payrolls report fell well short of expectations, alongside a decline in bond yields, which has brought the possibility of a 50 basis point rate cut to the forefront instead of the predicted 25 basis points.
Fed’s Rate Decision and Its Impact on Cryptocurrencies
On September 9, Hayes mentioned on his X account that the drop in U.S. 2-year Treasury yields and the nonfarm payroll data, which recorded only 22,000 compared to the anticipated 75,000, support the argument for a 50 basis point rate cut. The disappointing data further bolsters the perception of a weakening job market.
According to CME FedWatch Tool data, there is an 88% likelihood of a 25 basis point rate cut at the Fed meeting. Furthermore, there is a 70% chance of an additional 25 basis point cut in December. If these cuts occur, it is anticipated that new liquidity will flow into the markets. Although the total market size of cryptocurrencies has fallen below $4 trillion following Bitcoin 
$91,081‘s decline, potential rate cuts may alter this scenario.
Expectations for DeFi and Ethena (ENA)
Hayes noted that rate cuts could drive large amounts in money market funds to seek alternative returns. He emphasized that the decentralized finance (DeFi) sector could significantly attract capital in this process.
In this context, Ethena’s staked USDe (sUSDe) product, offering a 7% yield, has captured attention, suggesting institutional investors might turn their interest here. Additionally, the supply of Ethena’s USDe is projected to rise from the current $12.98 billion to exceed $20 billion.
Hayes also shared his price forecast for the ENA coin, suggesting that the altcoin could surpass $1.50 in the coming months. At the time of writing, ENA is trading at $0.792. The coin has gained over 4% in the last 24 hours, and its trading volume has increased by approximately 75%. Hayes, with his recent purchases, now controls a total of 4.45 million ENA, valued at $3.48 million.
