Fidelity: Fed rate cuts may benefit DeFi and stablecoins

Fidelity said that the expected rate cut by the Federal Reserve may rekindle major institutions' interest in decentralized finance (DeFi) and stablecoins, provided that infrastructure further develops this year. According to Fidelity's 2024 Digital Asset Outlook report released on January 13th, although institutions were expected to enter DeFi for its returns last year, it did not materialize as they shifted towards "perceived safer" traditional fixed-income products due to the Fed's interest rate hikes. If DeFi returns become more attractive than traditional finance (TradFi) returns again and more advanced infrastructure emerges, institutions may develop a "new interest" in DeFi in 2024.