Why Bitcoin Remained Unchanged While the Fed Loosened Its Grip

On September 17, 2025, the U.S. Federal Reserve initiated its first rate reduction of the cycle, lowering its target range from 4.00%-4.25% to 3.75%-4.00%. This move, which the CME FedWatch tool predicted with over a 90% likelihood, signaled a significant shift for international financial markets, especially impacting the cryptocurrency landscape. The adjustment is projected to loosen financial conditions, decrease borrowing expenses, and possibly soften the U.S. dollar, creating a more supportive backdrop for risk-oriented assets like

and Ethereum.

Following the announcement, Bitcoin’s price held steady, trading close to $81,000, despite experiencing a 2.6% dip earlier in the week. In contrast, gold soared past $2,917 as investors looked for safety amid mounting economic worries. Although Bitcoin is frequently described as “digital gold,” its price movements reflect its ongoing status as a high-risk asset, particularly given its strong links with stock and tech markets. Experts note that Bitcoin’s pronounced volatility continues to hinder its acceptance as a genuine safe haven.

The effects of the Fed’s rate cut on cryptocurrencies are complex. A more accommodative monetary stance can boost sector liquidity, appealing to investors seeking better yields. This was apparent ahead of the meeting, as the U.S. Dollar Index weakened and major digital currencies gained momentum. Nonetheless, the broader economic outlook remains uncertain. Inflation remains above the Fed’s goal, and worries about stagflation have not subsided. These lingering issues may limit potential gains for crypto assets even as monetary policy becomes more supportive.

Optimists argue that the Fed’s move provides a liquidity boost for Bitcoin and the wider market. Past instances, such as the rate reductions in 2019 and 2020, have shown Bitcoin can benefit from a looser policy. Furthermore, recent spot ETF approvals and rising institutional engagement have bolstered the market. Conversely, cautious analysts warn that initial rate cuts can bring short-term market swings. The upcoming September triple witching event in stock markets and possible new SEC regulations could further heighten volatility in both crypto and traditional sectors.

Retail traders are encouraged to act prudently. Tactics like diversifying holdings, managing leverage, and gradually entering positions are advised to help control risk. The Fed’s messaging during the post-meeting press conference was pivotal in shaping investor attitudes. An optimistic tone could sustain positive momentum, whereas a cautious or hawkish stance might lead to profit-taking or brief market pullbacks. Additionally, macroeconomic signals such as changes in inflation and employment data will play a key role in guiding Bitcoin’s movement in the near term.

The overall consequences of the rate cut are still open to debate. While Bitcoin’s short-term response ranged from neutral to optimistic, its future path will depend on how the Fed handles the balance between inflation, economic growth, and financial stability. As markets react to the initial changes, focus will shift to forthcoming economic reports and regulatory updates, which could either support or challenge the prevailing bullish outlook.