Key Takeaways:
Fed expected to hold rates at 4.25%–4.50%, with decision set for 2 p.m. EDT Wednesday.
Bitcoin traders focus on the dot plot, not the rate itself.
A hawkish projection could weigh on BTC price and fuel fiscal pressure in the U.S.
The Federal Reserve is widely expected to leave interest rates unchanged on Wednesday, but Bitcoin traders aren’t watching the rate decision — they’re focused on the dot plot, a key chart outlining policymakers’ rate projections.
According to CME FedWatch, the Fed will likely hold rates steady at 4.25%–4.50%, despite pressure from President Trump for cuts. The spotlight now turns to the FOMC’s dot plot, which could shape crypto price action depending on how many rate cuts are projected for the rest of 2025.
Dot plot could drive BTC volatility
“If the Fed signals fewer than two cuts, it supports the ‘higher-for-longer’ narrative. That could strengthen the dollar and suppress crypto bids,” said XBTO, a crypto trading firm. A dovish surprise, however, might reignite Bitcoin momentum after its rally stalled above $100,000.
Matteo Greco, senior analyst at Fineqia, noted that expected rate cuts for 2025 have already been halved from 100 bps to 50 bps, and geopolitical risks could lower that to just 25 bps.
Why it matters for Bitcoin
A hawkish Fed stance could hurt Bitcoin short term but may boost its long-term appeal as U.S. debt servicing costs rise. “The higher rates go, the more pressure on U.S. fiscal health — and the more attractive hard assets like gold and Bitcoin become,” Greco added.
