Fed Rate Cut Spurs Crypto Surge; Stablecoins Face Risks

* U.S. Federal Reserve cuts interest rates by 25 basis points, signaling more for 2025. * Crypto exchanges to benefit from increased trading; stablecoin issuers like Circle face revenue challenges. On September 18, 2025, the Federal Reserve cut interest rates by 25 basis points. According to a report from The Block on September 18, this move sparked immediate gains for major exchanges while creating challenges for stablecoin issuers. The announcement drove market movements, causing major cryptocurrencies and related stocks to respond positively. In a September 18 analysis, Mizuho analysts noted that lower interest rates historically correlate with increased trading activity. As a result, they project this trend will boost revenues for companies like Coinbase (COIN), Robinhood (HOOD), and eToro (ETOR), which rely on commissions from higher trading volumes. The market reacted as projected following the announcement. Major cryptocurrencies rose by approximately 2%, while in the stock market, Coinbase shares surged by 8%, and Robinhood and eToro each gained 3%. Consequently, Mizuho’s analysts revised their price targets, raising Coinbase’s target from $267 to $300 but maintaining its “neutral” rating. Meanwhile, Robinhood and eToro kept their “outperform” ratings, showing optimism about their performance in the current trading environment. However, the rate cut presents challenges for stablecoin issuers like Circle (CRCL), whose business model depends heavily on the yield from U.S. Treasury reserves backing its USDC stablecoin. Lower interest rates reduce the returns on these reserves, which could strain profit margins. Reflecting these concerns, Mizuho gave Circle an “underperform” rating and lowered its price target to $84. Despite this negative outlook, Circle’s stock rose by approximately 5.8%, an increase that may reflect broader market sentiment or other temporary factors. On September 18, data from CoinMarketCap showed that as of 19:46 UTC, USD Coin (USDC) was trading at $1.00, and its 24-hour trading volume had changed by 38.93%.