Bitcoin Bounces as Markets Brace for the Fed’s Next Move

The Federal Reserve delivered a quarter-point increase to its policy rate, lifting the federal funds target to a 3.75%–4.00% range in a unanimous decision by the Federal Open Market Committee. Traders had largely anticipated the step, with the CME FedWatch tool showing roughly a 93% chance of a hike ahead of the announcement. Crypto markets showed limited disruption after the decision. Bitcoin briefly spiked to about $76,499 before settling near $76,300, leaving its daily performance roughly flat. The overall crypto market capitalization held around $2.63 trillion, and the Crypto Fear and Greed Index registered 50, a neutral reading following a recent period of “extreme greed.” Traditional markets reacted more sharply: the Dow fell about 1.2% and the S&P 500 slipped roughly 0.4%–0.5% on Wednesday, while the 10-year Treasury yield earlier reached levels above 5%, a high not seen since 2007. Market participants noted that higher policy rates tend to lift returns on cash and Treasurys relative to assets like Bitcoin and gold, and can also strengthen the dollar—factors that generally weigh on risk assets. Not all crypto tokens moved in step with Bitcoin. Zcash emerged as a standout, jumping as much as 23% to trade near $1,425 after Paradigm co-founder Matt Huang said his firm holds ZEC and supports the Zcash Open Development Lab. ZEC has seen sharp gains recently—rising about 37% in May, roughly 160% over the past month, and nearly 3,000% over the last year—making it the best performer among the top 10 cryptocurrencies by market capitalization this week. Market flows included roughly $373 million in crypto liquidations over 24 hours, with shorts comprising the larger share as prices climbed into the Fed decision. The Fed’s median projections still leave room for another quarter-point move, with a projected federal funds rate of 4.1% by the end of 2026; the central bank’s next policy meeting is set for October 27–28.