Bitcoin News Today: Bitcoin's ETF-Driven Stability as Fed Signals Rate Cuts

Bitcoin Holds Steady as Federal Reserve Minutes Indicate Possible Rate Adjustments

The U.S. Federal Reserve's Federal Open Market Committee (FOMC) is set to deliver a 25-basis-point rate cut in October 2025, a move that has sparked renewed interest in Bitcoin as investors weigh the implications for crypto markets. The anticipated reduction in interest rates, which would bring the federal funds rate to 3.75%-4.00%, is expected to influence Bitcoin's price dynamics through its effects on liquidity, risk appetite, and the U.S. dollar's strength. Historical data suggests that Bitcoin often experiences volatility around Fed rate decisions, with mixed short-term outcomes but long-term gains during sustained periods of monetary easing.

The Fed's decision follows a broader trend of easing monetary policy, with market participants pricing in a 95% probability of the 25-basis-point cut via the CME FedWatch tool. Analysts note that while immediate market reactions to rate cuts can be unpredictable, Bitcoin's performance over the past decade has shown a strong correlation with extended periods of low interest rates. For instance, the Fed's emergency rate cuts in 2020 coincided with a surge in Bitcoin's price from $4,000 to over $60,000 by 2021, driven by increased liquidity and a weakened dollar. This pattern has been reinforced by the growing adoption of Bitcoin ETFs, which now hold 1.296 million BTC-nearly 6.5% of the total supply-and have become a key driver of Bitcoin's liquidity and institutional demand.

Bitcoin ETFs, particularly BlackRock's iShares Bitcoin Trust (IBIT), have seen sustained inflows, with $441 million in net inflows recorded on October 8, 2025 alone. These inflows are critical for Bitcoin's price stability, as they create a consistent demand base that mitigates sharp corrections. The ETF structure also enhances price discovery by aligning Bitcoin's spot price with derivatives markets, a factor that has reduced bid-ask spreads and improved overall market efficiency. However, experts caution that large inflows can amplify price swings in both directions, particularly if macroeconomic conditions or regulatory changes disrupt investor sentiment.

The Fed's minutes, released after its September 17 meeting, emphasized the need for a "soft landing" in the economy, balancing inflation control with growth. While the central bank acknowledged progress in cooling inflation, it noted persistent wage pressures and a resilient labor market. This nuanced stance has led to divergent forecasts for Bitcoin's price trajectory. Veteran trader Ted outlined two scenarios: a short-term dip to $104,000 or $92,000 followed by a recovery to new highs, or a more gradual rally supported by sustained ETF demand. The latter scenario appears increasingly plausible given the $1.2 billion net inflow into U.S. Bitcoin ETFs on October 7, a level historically associated with Bitcoin reaching short-term peaks.

Bitcoin's resilience has also been bolstered by its role as a hedge against inflation and a store of value in a low-yield environment. As the Fed's rate cuts reduce the returns on traditional fixed-income assets, investors have increasingly allocated capital to Bitcoin, which offers both diversification and exposure to a weakening dollar. This dynamic was evident in 2020, when Bitcoin's price surged amid the Fed's stimulus measures, and is now being replicated as ETFs lower barriers for institutional participation.

Looking ahead, the Fed's post-meeting press conference will be pivotal in shaping market expectations. A dovish tone suggesting additional rate cuts could extend Bitcoin's rally, while a hawkish stance-indicating a pause in easing-might trigger a short-term pullback. Analysts at Goldman Sachs note that the current easing cycle, expected to continue into 2026, supports risk assets, with small-cap equities and Bitcoin ETFs likely to benefit from reduced borrowing costs. However, risks remain, including regulatory scrutiny, macroeconomic headwinds, and the potential for stagflation if inflation proves stubborn.

[1] Forbes (https://www.forbes.com/sites/greatspeculations/2025/09/15/how-bitcoin-price-reacts-to-fed-rate-cuts/)

[2] Bitrue (https://www.bitrue.com/blog/fed-rate-cut-october-2025)

[3] Coinpedia.org (https://coinpedia.org/price-analysis/bitcoin-price-prediction-fed-rate-cut-could-trigger-92k-or-104k-dip-before-rally/)

[4] Analytics Insight (https://www.analyticsinsight.net/cryptocurrency-analytics-insight/5-major-changes-bitcoin-etfs-have-caused-in-the-market)

[5] Digital One Agency (https://digitaloneagency.com.au/etf-flows-and-how-they-impact-btc-liquidity/)

[6] Financefeeds (https://financefeeds.com/bitcoin-etfs-record-441-million-inflows-as-institutional-momentum-builds/)

[7] Coindesk (https://www.coindesk.com/markets/2025/10/07/u-s-bitcoin-etfs-log-usd1b-inflows-again-a-level-that-s-marked-local-tops-six-times-before)

[8] Federal Reserve (https://www.federalreserve.gov/econres/notes/feds-notes/lessons-from-past-monetary-easing-cycles-20240531.html)

[9] Goldman Sachs Asset Management (https://am.gs.com/en-us/advisors/insights/article/2025/market-brief-cutting-through-noise-navigating-fed-easing)