Bitcoin Price Wobbles Before Settling After Fed Raises Rates
Bitcoin Magazine Bitcoin Price Wobbles Before Settling After Fed Raises Rates Bitcoin is down over the past week after traders had bet that the central bank would hike interest rates. This post Bit...
Bitcoin's price is down over the past week after traders had bet that the central bank would hike interest rates.
Bitcoin’s price swung before settling largely unmoved over a 24-hour period after the Federal Reserve hiked interest rates — as expected — for the first time since 2023.
The leading cryptocurrency was recently priced at nearly $75,813 after dropping as low as $75,355 in the hour after the U.S. central bank gave its decision to increase the benchmark federal funds rate to a range of 3.75% to 4%.
Traders had bet there was a more than 90% chance that the Fed would raise interest rates ahead of its September meeting. Major Bitcoin trades therefore likely happened before Wednesday.
Speaking to reporters on Wednesday, Federal Reserve Chair Kevin Warsh didn’t reveal much about the central bank’s next moves but made it clear that price stability in the U.S. was its number one priority.
“The decision we made today was a sober decision, serious decision, responsible decision, one that we have been preparing for and thinking about in my 110 or 120 days here,” Warsh said.
He added: “The plain fact is that inflation is too high, and has been for too long. This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”
Wash — who has previously praised Bitcoin — said last month in his first major speech as head of the U.S. central bank that inflation was too high and had to be brought down.
The new chair is seemingly going against President Donald Trump’s wishes; the president has repeatedly called for lower interest rates and even threatened to fire the ex-Chair of the Federal Reserve for refusing to do so.
In a post on his Truth Social platform last week, the president wrote: “We should have the LOWEST RATE of any country in the World, like ‘the old days.'”
When asked by reporters about what he would say to the president, Wash replied: “I’ve got nothing for you on a discussion with the president.”
Bitcoin typically does well in a low interest rate environment because there is more liquidity to buy the asset.
The U.S. is currently in the midst of an affordability crisis and war in the Middle East has pushed up the price of oil, in turn compounding the problem as the cost of everyday goods in the world’s largest economy rises.
Asanat Analysis — Why it matters
Fed rate hikes compress risk asset valuations by raising the opportunity cost of zero-yield holdings like Bitcoin. The price action here—initial weakness followed by stabilization—suggests the market had already priced in hawkish expectations, limiting the magnitude of the move. This differs from surprise hikes, which typically trigger sharper drawdowns as traders unwind leveraged positions.
The pattern signals growing maturity in Bitcoin's relationship to macro policy. Rather than panic selling, traders are parsing the Fed's forward guidance and economic projections to assess whether rate levels have peaked. A stabilization post-move indicates confidence in current pricing relative to terminal rates, though sustained elevated rates remain a headwind for assets lacking cash flows or yield.