Crypto markets failed to rally on Wednesday, September 17 after Federal Reserve policymakers cut benchmark rates for the first time since December.
Bitcoin, the world’s largest digital currency by total market value, was trading between $115,000 and $116,000 when the Federal Open Market Committee released a statement at 2 p.m. EST announcing that it was lowering the target range for the federal funds rate to 400 to 425 basis points, according to Coinbase data.
Over the next several hours, the price of this digital assets moved little, falling below $115,000 and then rising to roughly $117,000 around 7 p.m. EST, additional Coinbase figures reveal.
Ether, the second-largest cryptocurrency, experienced some modest volatility, going from roughly $4,600 at the time of the announcement to roughly $4,430 and then climbing back to approximately $4,620.
When explaining these developments, some analysts claimed that the 25 bp rate cut had already been baked in by the markets.
Julio Moreno, head of research for CryptoQuant, spoke to this via Telegram, stating that “Today, we did not see much volatility as the Fed interest decision had been long anticipated–the market was seeing a 25bps cut with above 90% probability.”
Brian Huang, cofounder of fintech firm Glider, also weighed in, indicating via emailed correspondence that “Crypto markets had widely priced-in today’s rate cut, and so BTC and ETH are flat on the day.”
Several analysts described this rate cut as a positive development for the markets.
“The Fed’s rate cut today is a positive signal that liquidity is back on the table, resulting in a short-term boost in sentiment,” Qin En Looi, managing partner at venture capital firm Onigiri, stated via email.
Moreno offered a similar perspective, stating that “In general, a Fed cut is a positive catalyst for risk assets such as cryptocurrencies and could mark the start of a rally into Q4 as the Fed guidance was for more interest rate cuts this year.”
Fed’s Key Role
Going forward, several analysts emphasized the crucial role that the central bank will play in the crypto markets.
“When Powell blinks, risk assets breathe, and Bitcoin inhales deeper than most,” Doug Colkitt, a founding contributor at Fogo, said through email.
“The sad but inescapable reality is that the market is still addicted to Fed signals, even if crypto was built to escape them,” he added.
Thomas Perfumo, global economist at Kraken, also commented on this situation, offering a forward outlook.
“The Federal Reserve and markets appear aligned on the expected path of rate cuts through late 2025 and into 2026, a backdrop that remains broadly supportive for risk assets, including crypto,” he stated via email.
“Looking forward, market performance hinges on macroeconomic indicators such as employment and inflation data. These will play a central role in determining whether incremental 25bps cuts are sufficient,” Perfumo added.
Greg Magadini, director of derivatives for digital asset data provider Amberdata, also weighed in, emphasizing how important it is for the Fed to act of its own free will and accord.
“I continue to believe the biggest driver of asset prices, especially Gold and Bitcoin, revolves around the Fed’s independence. This independence remains in question especially going into 2026 when a new Fed Chairman will take over,” he stated via email.
While central bank policy will have an important impact on the crypto markets, innovation in the space will be the driving force behind changes in asset prices, claimed Colkitt.
“If the Fed stays on a dovish path, expect more capital rotating into crypto’s higher-beta plays,” he stated.
“But let’s be clear: macro is the wind, and crypto innovation is the engine. Rate cuts might kick off the next leg, but real adoption is what keeps it running over time.”
