Bitcoin News Today: Crypto traders shift bets as Fed rate cut expectations wane amid mixed economic data

Traders in the cryptocurrency market are recalibrating strategies as expectations for Federal Reserve rate cuts shift amid conflicting economic signals. On August 15, 2025, market participants reduced their bets on an imminent rate cut, now anticipating a 25-basis-point reduction in September, with diminished chances of a more aggressive cut later in the year. This recalibration is influencing capital flows, with Ethereum experiencing outflows and Unichain seeing net inflows, highlighting a rotation from well-established assets to emerging altcoin platforms [1].

The Federal Reserve’s policy trajectory has long influenced crypto market dynamics. Historically, Bitcoin has served as a hedge against inflation, often rallying during rate-cut cycles. However, recent hotter-than-expected inflation data, including the July Producer Price Index, has disrupted this trend, causing a brief correction in Bitcoin and Ethereum prices [7]. Bitcoin retreated from a record high of $124,000 to $117,491.60, with its 90-day price increase at 13.99% and a market cap of $2.34 trillion [1].

Market positioning continues to reflect evolving sentiment. Traders are increasingly cautious, with the CME FedWatch tool indicating a 92.8% probability of a quarter-point cut in September following the PPI report [7]. However, expectations for a more aggressive easing have waned, with only 11.6% of respondents in an FOMC survey anticipating a 25-basis-point cut in December and 44.7% expecting a 50-basis-point move [2]. These diverging forecasts underscore the uncertainty surrounding the Fed’s path forward.

The broader pro-crypto stance of the Trump administration also influenced the recent price action, as seen in an executive order allowing exploration of 401(k) plans that include crypto assets. Additionally, corporate buying—catalyzed by companies like MicroStrategy—has contributed to Bitcoin’s upward trend [1]. However, Treasury Secretary Scott Bessent’s comments that the U.S. government would not be purchasing Bitcoin for its strategic reserve cast a shadow over further gains [1].

Analysts suggest that while short-term volatility is likely, the long-term outlook for crypto remains favorable. Fundamental changes, including regulatory developments and growing institutional adoption, are creating a more structured and resilient market [1]. The launch of spot Bitcoin ETFs and continued inflows into the product have added further support [1].

As of August 9, 61% of economists anticipated a 25-basis-point rate cut in September [3]. However, the recent inflation data and Bessent’s remarks have tempered optimism, contributing to a more cautious trading environment. The crypto market’s performance remains closely linked to the Fed’s policy outlook, with traders adjusting positions based on evolving forecasts and macroeconomic signals [4].

Source:

[1] Bitcoin sinks following hotter-than-expected inflation print (https://finance.yahoo.com/news/bitcoin-sinks-following-hotter-than-expected-inflation-print-bessent-comments-on-strategic-reserve-171107469.html)

[2] Cryptos Dip In Tandem With Ebbing Rate Cut Hopes (https://www.rttnews.com/3566522/cryptos-dip-in-tandem-with-ebbing-rate-cut-hopes.aspx)

[3] US Fed to cut rates in September and once more this year (https://www.reuters.com/business/us-fed-cut-rates-september-once-more-this-year-say-most-economists-2025-08-15/)

[4] Traders Adjust Expectations for Federal Reserve Rate Cuts (https://www.binance.com/en/square/post/08-15-2025-traders-adjust-expectations-for-federal-reserve-rate-cuts-28349757020273)

[7] Bitcoin, Ethereum Fall as PPI Shock Squashes Hopes for ... (https://finance.yahoo.com/news/bitcoin-ethereum-fall-ppi-shock-190003159.html)