The world's leading cryptocurrency is surprisingly indifferent to the Fed's interest rate decision.

Fed lowers interest rates but Bitcoin price does not increase

The US Federal Reserve (Fed) has just cut interest rates for the first time in 2025, reducing them by 25 basis points to 4-4.25%/year. This move is often seen as a catalyst for supporting risk assets, but Bitcoin has hardly responded positively.

Immediately after the announcement, Bitcoin quickly fell from the $116,000–$117,000 range to below $115,000 in just a few minutes and has been fluctuating sideways since. The total cryptocurrency market capitalization remains above $4 trillion, down less than 1% in 24 hours according to CoinMarketCap.

The "buy the rumor, sell the news" strategy dominates the market

According to Decrypt's analysis, the Fed's interest rate cut was predicted by the market with a 96% probability. Investors applied the strategy of "buying the rumor, selling the news", which means buying when there are positive expectations and taking profits as soon as the official information is announced.

This strategy prevented Bitcoin from breaking out even though the Fed had started its easing cycle. The Crypto Fear and Greed Index fell to 51 points, 6 points lower than last week, reflecting neutral investor sentiment.

The Fed's cautious stance has an impact

Fed Chairman Jerome Powell said the decision to cut interest rates was purely for “risk management” purposes and not to support the slowing US economy. This cautious approach also helps explain the tepid reaction in the cryptocurrency market.

The Fed's decision was also influenced by political factors. Governor Stephen Miran, a supporter of President Donald Trump, was the only member to vote against, saying the Fed should lower by 50 basis points.

Experts assess Bitcoin prospects

"The 25 basis point cut was just the spark, the Fed's hesitation is what will make it more challenging for Bitcoin to conquer new highs," said Matt Mena, strategist at 21Shares.

However, Gerry O'Shea, head of research at Hashdex, said that Bitcoin's "muted" reaction does not mean the market is weakening. He predicted that demand from businesses and ETF inflows could be the driving force for BTC prices in the coming weeks.

Bitcoin is now only about 7% above its previous post-election peak, lagging the S&P 500’s 9% gain and far behind gold’s 36% gain over the same period. The average performance of the 20 largest cryptocurrencies is also down 0.43%.

Bitcoin Price Increase Potential in the Future

From a technical perspective, Bitcoin is in a stronger “compression” than stocks and gold, which could set the stage for a significant rally as capital flows return. The Fed’s policy hesitation could persist, depending on inflation and employment developments in the coming period.

Despite the current lukewarm reaction, many experts still expect Bitcoin to make strong moves as corporate and ETF support continues to grow.