Crypto rallies through the Fed's first rate increase since 2023

The Federal Open Market Committee voted to increase its target federal funds rate by 25 basis points to a 3.75%–4.0% range, marking the central bank’s first rate rise since July 2023. Fed Chair Kevin Warsh said inflation remained too high, but the committee’s updated “dot plot” showing a median policy rate of 4.1% at the end of both 2026 and 2027 led markets to conclude that only one more quarter-point move is likely and no extended tightening cycle is expected.

Risk assets responded positively to the Fed’s forward guidance. U.S. equity futures and precious metals advanced while the dollar weakened modestly. Cryptocurrencies rallied in step with broader risk markets: 94 of the 100 CoinDesk 100 constituents were higher over 24 hours, the small-cap CoinDesk 80 rose 4.7%, and the bitcoin-dominated CoinDesk 5 gained 1.2%.

Bitcoin traded near $76,621, up about 0.9% in 24 hours, with ether around $2,444 and solana at roughly $100.57. Despite the intraday price gains, U.S. spot bitcoin ETFs experienced net outflows in recent sessions, shedding $295.98 million on Wednesday and more than $1 billion across seven sessions since Sept. 8, bringing combined net assets to $95.19 billion according to SoSoValue.

Derivatives activity suggested traders were adding exposure into the rally rather than closing shorts: aggregate crypto futures open interest rose to $64.4 billion from $59.7 billion earlier in the week on $112.6 billion of 24-hour volume. Bitcoin and ether open interest increased modestly, while zcash showed the largest jump — open interest rose 37.84% to about $2.2 billion, coinciding with a 23% price surge to a record near $1,369 after Paradigm co-founder Matt Huang disclosed his firm holds ZEC. Funding rates and liquidation figures signaled active positioning, with $214.3 million liquidated over the past day per Coinalyze.

The altcoin rally was uneven: privacy token zcash outperformed, while peer Monero slipped slightly. Mid-cap tokens including NEAR Protocol and Venice Token posted strong gains, and speculative smaller tokens led some of the biggest daily percentage moves, lifting CoinMarketCap’s altseason indicator to 39/100 after being lower earlier in the week.