How Will Crypto Markets React If the Fed Holds Rates or Cuts Them?

The Federal Open Market Committee (FOMC) is set to announce its final policy decision, with markets heavily leaning towards an 89.4% chance of a 25-basis-point rate cut, which would be the third consecutive cut this year. Historically, rate cuts have caused brief lifts in crypto markets and weakened the US dollar, and analysts generally view another cut as 'bullish' for risk assets like Bitcoin. However, some analysts suggest the market has already priced in a standard cut, making Fed Chair Powell's subsequent press conference the real catalyst for significant movement. Powell's tone regarding inflation, labor, and potential liquidity injections will dictate whether markets expect further easing.

If the Fed holds rates, which is less likely but possible due to disrupted economic indicators, crypto sentiment could suffer a short-term bearish reaction. Despite this, long-term bullish trends might persist, as reports suggest the Fed plans liquidity-boosting Treasury bill purchases starting in January 2026, which some view as a return to quantitative easing (QE). Ultimately, whether the Fed cuts, holds, or surprises with a larger cut, significant volatility is expected, with forward guidance being crucial for crypto traders.

(Source：BeInCrypto)