Bitcoin News Today: Bitcoin Loses Ground to Altcoins as Fed Cuts Boost Risk Appetite

The Federal Reserve's anticipated rate cuts in October and December 2025 are shaping expectations for a potential boost in risk appetite across financial markets, including cryptocurrencies. Analysts suggest that looser monetary policy could drive capital into risk assets, with Bitcoin and altcoins potentially benefiting from cheaper liquidity. However, the crypto market's dynamics are shifting, as altcoin season gains traction amid growing speculation about the Fed's dovish stance.

Bitcoin's market dominance has declined by 3.5% over the past month, with indexes tracking its performance against altcoins entering "altseason" territory. This trend reflects a broader rotation of capital toward smaller cryptocurrencies, including meme coins, as traders anticipate the Fed's rate cuts. The CoinDesk Memecoin Index (CDMEME) surged 7.1% in the last 24 hours, outpacing Bitcoin's 0.3% gain, highlighting the sector's volatility and speculative appeal.

The Federal Reserve's decision to cut rates is widely expected, with Polymarket traders assigning a 92% probability to a 25-basis-point reduction in October and a 7% chance of a 50-basis-point cut. Such moves could incentivize investors to seek higher returns in riskier assets, including cryptocurrencies. However, the impact on Bitcoin remains uncertain. While lower rates may reduce opportunity costs for holding unbacked assets, the crypto market's focus has shifted toward altcoins, particularly meme tokens like Shiba Inu (SHIB) and Dogecoin (DOGE), which have seen increased trading volumes and social media-driven demand.

The anticipated rate cuts coincide with growing interest in altcoin exchange-traded funds (ETFs), including potential listings for DOGE and other tokens. If approved, these products could attract both retail and institutional investors, further diverting attention from Bitcoin. The CME's FedWatch tool indicates a 93% probability of a smaller rate cut in October, reinforcing the likelihood of a broader risk-on environment.

Bitcoin's bull run faces a dual challenge: macroeconomic tailwinds from the Fed's policy and competition from altcoins. While lower rates could support Bitcoin's price by reducing the cost of leveraged positions, the market's enthusiasm for meme coins and DeFi projects suggests a structural shift. For instance, SHIB's price has remained range-bound near $0.000012, constrained by bearish technical indicators and a recent security incident at its Shibarium networkShiba Inu Plummets to $0.000012: Shibarium Hack Rocks SHIB on September 30, 2025^[3]. In contrast, tokens like LILPEPE and FARTCOIN have surged on social media-driven speculation, underscoring the market's preference for high-volatility assets.

Analysts caution that Bitcoin's performance will hinge on its ability to retain capital inflows in a landscape increasingly dominated by altcoins. The Fed's rate cuts may provide a macroeconomic floor for crypto prices, but the sector's fragmentation could limit Bitcoin's upside. Institutional adoption of altcoin ETFs, coupled with the ongoing migration of retail investors to meme coins, may further dilute Bitcoin's market share.