The Fed Cut Rates and Bitcoin’s Reaction Says More Than You Think.
The Federal Reserve cut interest rates by 25 bps today, the kind of move that usually sends Bitcoin higher before the headlines finish loading. But this time, the rally never came.
Instead, the market paused, as if waiting for a signal that didn’t arrive. And when Powell finally spoke, it became clear why that signal never came.
Powell Spoke Clearly and Unclearly
Jerome Powell delivered a message that managed to calm and unsettle markets at the same time. Inflation risks are still leaning upward. Employment risks are leaning downward.
And the Fed sees “no risk-free path for policy.” The subtext was louder: Don’t expect meaningful cuts until 2026.
Bitcoin reacted accordingly. ETF outflows hit more than $1.1B in two days, and nearly $900M in long positions were wiped out across derivatives markets.
No scandal or hack. No crypto drama. Just macro gravity pulling everything down.
The AI Slip That Dragged Bitcoin With It
The drop didn’t start with crypto, it started with AI. A sudden unwind in high-beta tech knocked momentum out of AI stocks, and the quant models that now lump AI and crypto together as one “risk cluster” did the rest.
AI stumbled; Bitcoin exposure was cut automatically. It wasn’t a crypto correction. It was a correlation trigger.
Trump’s Shadow Over 2026
The market also heard something Powell didn’t say: His term ends in May 2026 and Trump wants a Fed chair who will cut rates aggressively. Kevin Hassett is the frontrunner, and unlike Powell, he’s already signaling a looser policy stance.
Bitcoin doesn’t trade on politics. But it does trade on liquidity. And liquidity, right now, is stuck in a holding pattern.
And the real question is: If Bitcoin now moves to the world’s rhythm, not its own, then the next swing won’t start in crypto at all, so where will it really come from?