Fed Raises Rates: Bitcoin Moved 4 Times More Than S&P 500 on Previous Two Decision Days
While Bitcoin fluctuated following the Fed’s 25 basis point rate hike, projections indicated that the high-interest rate period could last until the end of 2027.
The U.S. Federal Reserve (Fed) unanimously raised interest rates to the 3.75-4 percent range. Following the decision, Bitcoin moved between approximately $75,000-$76,500, while Ether fluctuated in the $2,370-$2,430 band. The Fed’s new projections showed that interest rates could remain at approximately 4.1 percent until the end of 2027.
Sixteen of the Fed’s 18 policymakers anticipate at least one additional 25 basis point hike this year. This outlook suggests that the rate hike may not remain a one-off move.
Bitcoin Moved More Than the S&P 500 on the Previous Two Fed Decision Days
The decision marked the Fed’s first rate hike since July 2023. The market largely expected this move; according to CME FedWatch data, the probability of a hike was priced at 92 percent before the decision.
Fed official Kevin Warsh said the economy is strengthening and financial conditions are not tight enough. Warsh stated that, for this reason, some of the support provided to the economy was being withdrawn.
Bitget analyst Lewis Huang stated that Bitcoin moved approximately four times more than the S&P 500 during the previous two FOMC trading days. According to Huang, this comparison shows that Bitcoin can exhibit higher volatility compared to stocks during interest rate decisions; it does not offer a direct bullish direction.
Huang noted that if pressure on energy prices eases, the Fed’s continued tightening could create a different scenario. The analyst stated that gasoline prices rising by about 4 percent in a month and diesel prices surging by 60 percent to reach a historic peak could impact the inflation outlook.
General movement in cryptocurrencies remained limited after the decision. XRP rose by approximately 1.5 percent, Solana by 1 percent, while Zcash gained 6.5 percent in value.