NEW YORK—Bitcoin prices steadied Wednesday after the Federal Reserve voted unanimously to keep its benchmark federal-funds target at 5.25%–5.50% and released projections pointing to just one quarter-point cut before year-end.
The world’s largest cryptocurrency traded around $67,800 at 4 p.m. ET, little changed from pre-meeting levels, according to CoinMarketCap data. Earlier in the day Bitcoin had swung between $66,400 and $68,200 as traders parsed the central bank’s policy statement and updated “dot plot,” which charts individual officials’ expectations for future rates.
In the accompanying Summary of Economic Projections, the median Fed official now expects the policy rate to finish 2024 at 5.25%, implying one 25-basis-point reduction. In March, the same chart pointed to three cuts. Fed Chair Jerome Powell told reporters the committee remains “highly attentive” to stubborn inflation and wants “greater confidence” that price pressures are easing before easing policy.
“The higher-for-longer message was already partly priced in, so crypto’s reaction has been muted,” said Maya Zehavi, a blockchain analyst who advises several digital-asset funds. “Still, fewer cuts mean the cost of capital stays elevated, which historically caps speculative appetite.”
Other risk assets echoed that caution: the S&P 500 slipped 0.3 percent while the tech-heavy Nasdaq Composite lost 0.5 percent. Ten-year Treasury yields climbed five basis points to 4.34 percent.
Crypto traders have spent months debating whether a looser monetary backdrop is essential for Bitcoin to retest its March all-time high above $73,000. Some argue that capital flowing into new U.S. spot-bitcoin exchange-traded funds can offset tighter financial conditions. “The demand we see from institutional ETF buyers is a structural tail-wind that wasn’t present in the last cycle,” said Alex Thorn, head of firm-wide research at Galaxy Digital.
Others remain wary. “If the Fed is forced to keep rates restrictive well into 2025, the opportunity cost of holding non-yielding assets like Bitcoin grows,” cautioned Francesca Riga, strategist at ING.
Looking ahead, traders will monitor next week’s personal consumption expenditures price index for confirmation that inflation is trending lower. A downside surprise could revive hopes of a second cut and, by extension, a stronger bid for cryptocurrencies. Until then, analysts expect Bitcoin to oscillate in a $65,000–$70,000 band, with macro headlines—rather than blockchain fundamentals—setting the tone.