Crypto Markets failed to meet on Wednesday, September 17th, after Federal Reserve policymakers cut benchmark fees for the first time since December.
Bitcoin, the world’s largest digital currency, was trading between $115,000 and $116,000 when the Federal Open Market Committee issued a statement at 2pm that announced it had been being reduced to 400-425 basis points at 2pm on EST, according to Coinbase Data.
Over the next few hours, the price of the digital asset moved little, falling below $115,000 and rose to around $117,000 at around 7pm on EST, additional Coinbase figures reveal.
Ether, the second-largest cryptocurrency, went from about $4,430 at the time of its announcement to about $4,620, and went back to about $4,620, experiencing modest volatility.
When explaining these developments, some analysts argued that a rate reduction of 25 bp was already burned down by the market.
Julio Moreno, head of research at Cryptoquant, spoke about this on Telegram, saying, “We didn’t see much volatility today as the Fed’s interest decision was long anticipated. The market had a 25bps cut with a chance of over 90%.”
Brian Huang, co-founder of Fintech Firm Glider, also showed weight, showing email communications saying, “BTC and ETH are flat on the day, as Crypto Markets is today’s rate reduction.”
Several analysts described the rate cut as a positive development in the market.
“Today’s Fed’s interest rate cuts are a positive signal that liquidity is back on the table, which in turn will boost sentiment in the short term.” onigiristated in an email.
Moreno offered a similar perspective, saying, “In general, the Fed cut is a positive catalyst for risky assets such as cryptocurrencies, and the Fed’s guidance for interest rate reductions this year could mark the beginning of a rally for more interest rate reductions in Q4.”
The key role of the Fed
In the future, several analysts highlighted the important role central banks will play in the crypto market.
“When Powell blinks, the risky assets breathe and the bitcoin gets sucked deeper than most,” Fogo founder Doug Colkitt said in an email.
“The sad but inevitable reality is that even if the codes were built to escape them, the market still relies on the Fed’s signals,” he added.
Kraken’s global economist Thomas Perfumo also commented on the situation and provided a prospect for progress.
“The Federal Reserve and markets appear to line up the pathway for the expected interest rate reductions from late 2025 to 2026.
“Looking forward, market performance depends on macroeconomic indicators such as employment and inflation data. These will play a central role in determining whether an incremental 25bps cut is sufficient,” Perfumo added.
Greg Magadini, Derivative Director for Digital Asset Data Providers Amber DataHe also weighed it and emphasized how important it is for the Fed to do its own free will.
“I continue to believe that the biggest factor in asset prices, especially gold and Bitcoin, revolves around the Fed’s independence, which depends especially on 2026 when the new Fed chair takes over,” he said in an email.
Central bank policies have a significant impact on the crypto market, but Colkitt argues that space innovation is the driving force behind changing asset prices.
“If the Fed stays on the dove path, expect more capital to spin into Crypto’s higher beta play,” he said.
“But let’s be clear: macros are winds, crypto innovation is engines. Rate reductions may start with the next step, but real adoption is something that continues to run over time.”
