Big Week for Bitcoin as Federal Reserve Decision on Interest Rates Looms

The Federal Reserve will make its latest interest rates decision on Wednesday, in what is shaping up to be a consequential week for Bitcoin.

Analysts are widely expecting that the central bank’s chair Jerome Powell will unveil another 0.25 percentage point reduction — to a range of between 3.75% and 4%.

And given that the Fed previously signaled that it is pencilling in two further rate cuts for 2025, we’re expecting to see a repeat performance in December too.

Generally speaking, lower interest rates are good news for BTC — for multiple reasons. The Federal Reserve’s cuts trickle down to savings accounts and bonds, prompting investors to seek healthier returns elsewhere. Increased liquidity also helps capital flow into riskier assets, especially if the dollar ends up weakening as a result.

However, if you’re expecting Bitcoin to surge higher as soon as Powell gives his news conference, prepare to be disappointed. The response on the crypto markets can be pretty muted when a cut is expected — or “priced in.”

Policymakers on the Federal Open Markets Committee have been pretty reluctant to slash the cost of borrowing, despite protests from Donald Trump, with this year’s first cut only coming into effect in September. A month after that announcement, BTC had actually fallen by 8.56%.

FXTM’s senior market analyst Lukman Otunuga told Cryptonews that the Fed’s decision may not end up being the biggest driver for Bitcoin this week, as a multitude of other factors are at play.

US President Donald Trump is set to meet his Chinese counterpart Xi Jinping on Thursday, with the markets looking for signs of a thaw in the escalating trade war between both countries. Trump’s announcement of fresh tariffs on Beijing earlier this month led to a violent correction across major cryptocurrencies.

It’s also a big week for the tech sector — with the likes of Meta, Alphabet, Microsoft, Amazon and Apple all reporting earnings this week. Given these giant companies have a collective market capitalization of $15 trillion, their performance could have a huge impact on the stock market — especially the tech-heavy Nasdaq 100 — which could help Bitcoin nudge higher.