Fed Raises Rates 25 Basis Points to 3.75%-4%, First Hike Since 2023, as Bitcoin Holds Near $76,000

The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4% on Wednesday, its first increase since 2023, with all 12 voting members backing the move, according to the Federal Reserve's own statement.

The decision came under Chair Kevin Warsh, who told reporters at his press conference that "the plain fact is that inflation is too high and has been for too long."

Warsh said the committee needed more evidence that underlying inflation was moving toward its 2% target "clearly and at sufficient speed" before it would consider pausing, adding that "this summer's inflation readings do not tell me that underlying trends have meaningfully improved," according to coverage of his remarks. The Fed's updated projections show 12 of 18 committee members expect at least one more quarter-point hike before year-end, and four expect half a point or more of further tightening, a hawkish skew that leaves the door open to a longer cycle than markets had priced heading into the meeting.

The FOMC statement dropped earlier language referencing conflict in the Middle East even as elevated oil prices, with Brent crude trading near $108 a barrel amid the ongoing war in Iran, continued to complicate the inflation picture. In remarks to the press, Warsh attributed part of the rise in long-term Treasury yields to "hotspots around the world" beyond energy markets alone, alongside underlying economic strength and heavy capital spending by large technology companies.

Crypto market reaction

Crypto markets treated the hike itself as a non-event. Bitcoin traded near $75,980, down about 1% on the day and roughly 4% over the past week, according to CoinGecko, while its premium on Coinbase relative to Binance turned negative for the first time in a month, a sign of softer spot demand from US buyers than from other regions. Coinbase, Strategy and Robinhood shares each ticked up roughly 1%, moves traders attributed more to the previous day's Clarity Act defeat settling in than to the Fed decision itself.

Talos research analyst Cooper Duschang said the muted spot reaction masked more active positioning underneath. "The initial reaction suggests the Fed's decision was largely anticipated by crypto markets," Duschang said. "Bitcoin has remained relatively resilient, holding broadly around pre-announcement levels even as equities moved lower, but beneath the headline price action there is a clear divergence between spot and derivatives markets." Talos data showed perpetual futures shifting toward net selling, with roughly $82 million in Bitcoin and $68 million in Ether sold over the hour following the announcement, even as Bitcoin spot recorded about $15.5 million of net buying. Exchange flows told a similar story of repositioning rather than a uniform retreat, with about 2,170 BTC moving onto exchanges immediately after the rate decision, followed by a withdrawal of roughly 1,260 BTC shortly after.

Fabian Dori, chief investment officer at Sygnum Bank, said the rate move itself carried little information because markets had settled on it days earlier. "The move itself was largely priced by Friday afternoon," Dori said. "What matters is the signal on the path from here, and a committee that tightens while flagging more to come is signaling increasing concerns that the oil shock is feeding into broader and more persistent inflation pressures." Dori said the more consequential channel for digital assets runs through structural liquidity rather than any single meeting, noting that Treasury cash balances, private credit creation and stablecoin supply "set conditions on a longer clock than any single meeting."

Martin Lee, market insights lead at digital-asset market maker DWF Labs, said the hawkish tone mattered more than the hike itself. "The renewed hawkish stance, higher for longer, would lead to risk-on assets repricing this new reality," Lee said. "The vulnerable longs sit between $75,000 and $76,000."