All news is rigorously fact-checked and reviewed by leading blockchain experts and seasoned industry insiders.
- Bitcoin’s reaction to Fed rate cuts shows more stable growth when policy moves are expected rather than sudden.
- Historical Fed cuts reveal Bitcoin responds to context and positioning, not just the size of the rate change.
The Federal Reserve (The Fed) has cut interest rates six times since 2019, and each cut raises a new question: how will Bitcoin react?
According to Wintermute, on July 31, 2019, the first 25 basis point cut since the 2008 crisis sparked initial enthusiasm. However, Bitcoin’s price corrected after initially rising, as if the market had already predicted the policy direction.
The situation repeated itself in September and October of the same year, when further cuts did not significantly impact the price because investors were already prepared.
The situation changed drastically in March 2020. As the pandemic spread, the Fed took emergency action, cutting interest rates twice in a short period of time, bringing them to a level of 0–0.25%.
Bitcoin wasn’t an immediate winner. Instead, its price plunged to around US$3,800, following the global panic. Only then did a prolonged rally begin, marking one of the sharpest recovery periods in the digital asset’s history.
On the other hand, this experience demonstrates the significant role the economic context plays in each of the Fed’s decisions.
What do 6 Fed cuts since 2019 reveal about Bitcoin?
Bitcoin moved 32% after the last surprise Fed cut and today's expected 25bp cut tells a different story
Pre-emptive policy + muted positioning (+2.6% in 14d) suggests steady uptick over euphoric rally pic.twitter.com/ApLp0g52KF
— Wintermute (@wintermute_t) September 17, 2025
A Different Market Response as the Fed Turns to Easing
Furthermore, on September 18, 2024, the Fed cut rates by 50 basis points. This decision was considered the start of a new easing cycle, and this time Bitcoin’s response was much more positive. The price immediately surged to around US$61,000. Unlike 2019 or 2020, market conditions were much more mature.
Liquidity was more secure, institutional involvement was growing, and new products like Bitcoin ETFs were expanding access. It’s no surprise, then, that the 2024 cut seemed to fuel the crypto market.
As 2025 approaches, expectations of a 25 basis point cut have long been circulating. Because it’s no longer a surprise, its impact is predicted to be less severe. Investors are now more focused on the tone of the Fed’s statement after the decision, whether it will signal further cuts or refrain from further action.
In such conditions, the market is more likely to favor gradual strengthening rather than a sudden rally. This aligns with the observation that the effects of monetary policy are determined not only by the size of the figures, but also by the sentiment that accompanies them.
Bitcoin Holders and Liquidity Shifts Shape the Outlook
Furthermore, other factors contribute to shaping the narrative. The CNF previously reported that the Bitcoin Scarcity Index on Binance surged for the first time since June.
Such spikes usually signal whale accumulation or a sudden decrease in liquidity. However, they are often short-lived and can even be followed by a cooling-off phase or market correction. This signal adds color to the analysis, as it reveals behind-the-scenes dynamics that are not always visible on the price chart.
We also highlight that long-term Bitcoin holders, the diamond hands, are aging. This means that coins held in the wallets of older investors are increasingly dominating. The illiquid supply has even reached a record high, a sign that more coins are moving into the older holding pool.
This figure reinforces the belief that the market is no longer entirely driven by short-term speculation. In other words, short-term selling pressure may be more limited, leaving room for gradual strengthening.
Meanwhile, as of press time, BTC is changing hands at about $116,630.42, slightly up 0.97% over the last 24 hours, with $48.24 billion in daily trading volume.
