Jack Paul 
Bitcoin drops following Fed decision
Bitcoin is trading lower today, and I think the main reason is pretty straightforward. The Federal Reserve cut interest rates overnight, but the market reaction hasn’t been what many crypto traders hoped for. Bitcoin dropped below $90,000 at one point, which represents about a 2.4% decline from earlier levels. Ether fell even more, down around 4%.
What’s interesting here is that the rate cut itself wasn’t the problem—it was exactly what everyone expected. The Fed lowered the benchmark rate by 25 basis points to 3.25%. But the messaging around future cuts seems to have disappointed traders. The central bank suggested just one more rate cut in 2026, which was fewer than some market participants had anticipated.
Internal Fed divisions create uncertainty
There’s growing evidence of divisions within the Fed itself. Two members voted against any change at all on Wednesday, and individual forecasts showed that six FOMC members felt a cut wasn’t “appropriate” right now. This internal disagreement makes it harder for traders to predict what comes next.
Greg Magadini from Amberdata put it well when he told CoinDesk that the market has “no real insight into the future path of rates” until May 2026, when Chairman Jerome Powell will be replaced. He suggested that the most likely outcome now is some market weakness—a “deleveraging” that might convince the Fed to lower rates more decisively.
Shiliang Tang of Monarq Asset Management noted that crypto markets initially spiked on the news but then moved lower in tandem with stock market futures. Bitcoin has tested but failed to break the $94,000 level three times in two weeks, which perhaps indicates some resistance at those higher prices.
Not the QE many hoped for
There’s another aspect worth mentioning. The Fed announced it will begin purchasing short-term Treasury bills to manage liquidity in the banking system. Some in the crypto community immediately called this quantitative easing, but that might be an overstatement.
This reserve management program involves buying $40 billion in short-term Treasury bills. While it does expand the Fed’s balance sheet, it’s primarily meant to address liquidity strains in money markets. It’s not the same aggressive, long-duration asset purchases we saw during traditional QE programs.
Andreas Steno Larsen from Steno Research had a good analogy on X: “This is sadly not Lambo QE. More like ‘my Uber is 7 minutes away’ QE.”
Some observers see this as a pre-emptive move against potential instability in money markets, similar to what happened in 2019. The Fed appears to be building a cushion now rather than scrambling later if problems emerge.
Looking ahead
So where does this leave Bitcoin and crypto markets? The implied volatility has continued to drift lower, with the last major market catalyst for the year now behind us. Traders might be looking at a period of consolidation or further weakness until there’s more clarity on the Fed’s future path.
The combination of fewer expected rate cuts, internal Fed divisions, and what appears to be a more cautious approach to liquidity management has created a risk-off environment. Bitcoin’s correlation with traditional markets seems to be holding, at least for now.
It’s worth watching how this plays out over the coming weeks. The Fed’s messaging has clearly shifted, and markets are adjusting to that new reality. Whether this represents a temporary setback or something more sustained remains to be seen.