Understand why Bitcoin is falling despite the rate cut in the US
Experts point out that the drop in Bitcoin is not a reaction to the cut, but rather the market anticipating a more complex macroeconomic environment.
Bitcoin continues in a downtrend even after the US central bank cut interest rates by 25 basis points on Wednesday.
The reduction in interest rates stimulates borrowing at lower costs, which is generally considered positive for risk assets.
Even so, Bitcoin fell 2% in the last 24 hours and is trading slightly below $90,200, according to data from CoinGecko.
“The drop in Bitcoin after the rate cut is not a reaction to the cut itself, but rather the market anticipating a more complex macroeconomic environment,” said Tim Sun, senior researcher at HashKey Group, to Decrypt. The market had already “fully priced in the cuts in advance,” he stated.
The main concern among analysts is that the space for new monetary easing is shrinking.
Although the Fed president, Jerome Powell, did not provide an explicitly aggressive guidance, the Fed's dot plot indicates that the expectations for rate cuts in 2026 have been revised downwards, suggesting that the easing cycle is coming to an end.
Sun pointed to a political and economic shift in 2026 as a critical risk.
“The US will have midterm elections in 2026, and the Trump administration will need a looser fiscal policy and a more dovish Fed to maintain economic and market prosperity. This means the US may temporarily see a combination of fiscal stimulus with monetary easing,” said the analyst.
However, he added, “such a combination is highly likely to reignite inflation, raising long-term rates again.” Once long-term rates rise, he said, “global risk assets come under pressure — including Bitcoin, which is sensitive to interest rates.”#criptomoeda
An increase in capital spending driven by AI, raising energy and infrastructure costs, may also create a more persistent — or “sticky” — inflationary environment, he added.
Reflecting on the Fed's statements yesterday, John Haar, managing director of Bitcoin financial services company Swan Bitcoin, said they “used cautious language when analyzing economic growth, inflation, unemployment, and the possible path of interest rates.”
He added that the Fed's “reserve management purchases” of T-Bills this week, with the expectation of buying $40 billion in 30 days, “reflect the first expansion of the Fed's balance sheet since it began QT in mid-2022, except for the banking crisis in March 2023.”
