TheBlock
Bitcoin and ether whipsawed after the Federal Reserve unanimously raised interest rates by a quarter percentage point, the central bank's first hike in more than three years. BTC traded between roughly $75,000 and $76,500 immediately after the decision and was changing hands near $75,600. ETH swung between about $2,370 and $2,430 before settling near the lower end at $2,376.
The FOMC voted 12-0 to lift its target range to 3.75%-4%, the first increase since July 2023. CME FedWatch showed traders pricing a 92% probability of the quarter-point move ahead of the decision, so the hike itself was expected. The surprise sat in the tone and the dots.
Why it matters
Chair Warsh struck a hawkish note, saying the economy appears to be strengthening and that financial conditions are not particularly tight. "I would be hard-pressed to describe broad financial conditions as restrictive," he said, adding that the committee had "removed a dose of accommodation." Sixteen of 18 policymakers project at least one additional quarter-point hike this year, handing markets a sequence rather than a single event.
The decision also puts the Fed at odds with President Trump, who has pushed for the lowest rates in the world and threatened trade action unless the Fed cuts. Warsh declined to engage with those threats during the Q&A.
Market impact
Bitget analyst Lewis Huang said bitcoin could absorb more of the immediate shock than equities, noting BTC moved roughly four times as much as the S&P 500 on the previous two FOMC days. "The market had one hike priced, and the dots have given it a sequence," he said. He flagged a risk the Fed keeps tightening after the energy-driven inflation impulse fades, citing gasoline up nearly 4% in a month and diesel at an all-time high.
The rest of the crypto market stayed muted. Most top-20 tokens were flat to up 0.5%, with XRP gaining 1.5%, SOL up 1%, and ZEC standing out with a 6.5% gain.
Frequently asked questions
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How much did the Fed raise rates and what is the new target range?
The FOMC voted 12-0 to raise the federal funds rate by a quarter percentage point, taking the target range to 3.75%-4%. It was the Fed's first hike since July 2023.
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How did bitcoin and ether react to the Fed decision?
Bitcoin traded between roughly $75,000 and $76,500 before settling near $75,600. Ether swung between about $2,370 and $2,430 and settled near the lower end at $2,376.
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What did the Fed's dot plot signal about future rate hikes?
Sixteen of 18 policymakers project at least one additional quarter-point hike this year, signaling a sequence of tightening rather than a single move.
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Why is Warsh's tone considered hawkish?
He said the economy appears to be strengthening and that broad financial conditions are not restrictive, framing the hike as removing accommodation rather than a one-off adjustment.
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How did the wider crypto market respond to the FOMC meeting?
The reaction was muted, with most top-20 cryptocurrencies flat or up 0.5%. XRP gained about 1.5%, Solana rose 1%, and Zcash stood out with a 6.5% gain.
CoinTelegraph
WuBlockchain
WatcherGuru
Benjamin Cowen