Fed cuts rate to 4.25%: how Bitcoin and crypto are reacting
The Federal Reserve has cut rates for the first time in 2025, to 4.25%.
The Federal Reserve has cut rates for the first time in 2025, to 4.25%. The decision was no surprise to financial markets: more than 90% of analysts anticipated this move.
The initial reaction in the crypto market, however, was modest. Bitcoin fell about 0.5% within an hour to $115,400, while Ethereum slipped slightly to $4,470 (-0.2%). XRP fared worse, down 1.7%, trading around $3.00.
According to Fed Chair Jerome Powell, rising unemployment played a role in the decision: weekly jobless claims rose to 264,000, the highest in four years. Meanwhile, consumer prices in August rose 2.9% year over year.
The rate cut could mark the end of years of tightening. Further cuts are expected in October and December. Meanwhile, pressure is rising from the record-high US national debt of $37 trillion, with an estimated $1.16 trillion in interest costs this year.
Investors should expect more volatility in the markets. For crypto, the policy of the U.S. central bank is the main guide, even more than that of the European Central Bank, which kept rates at 2.0% recently.
