Bitcoin News Today: Fed Rate Cut Odds Hit 84.6 Fueling Crypto Gains and Volatility

The probability of a U.S. Federal Reserve rate cut in September has surged to 84.6%, according to the CME FedWatch Tool, signaling a potential shift in monetary policy that is already influencing cryptocurrency markets. This increased expectation of easing has driven volatility in key crypto assets, with BNB reaching an all-time high and Ethereum (ETH) experiencing sharp price swings. The shift reflects heightened investor optimism and a broader move toward risk-on sentiment [1].

BNB’s recent price action underscores the sensitivity of crypto markets to macroeconomic developments. As of August 18, 2025, BNB traded at $856.27, with a 32.78% appreciation over the past 60 days and a 16.81% increase in 24-hour trading volume. The market cap of the asset stood at $119.27 billion, highlighting its growing role in the crypto ecosystem [2]. Analysts suggest that historical trends support the idea that dovish monetary signals often correlate with strong performance in digital assets, reinforcing the current rally [3].

The anticipated rate cuts have also prompted broader market positioning. Traders and investors are adjusting their portfolios in anticipation of a more accommodative Fed, with Bitcoin (BTC) benefiting from the narrative. However, the altcoin market has not experienced the same level of bullish momentum, with some assets like XRP seeing price declines. Some analysts view these dips as potential entry points, though caution remains widespread due to concerns over overvaluation [4].

Goldman Sachs has forecasted three rate cuts in 2025 and two more in 2026, bringing the terminal Fed funds rate down to a range of 3% to 3.25% [5]. Such projections have contributed to a shift in market expectations, with participants increasingly preparing for an extended easing cycle. The U.S. Treasury has also indicated that it will not directly purchase more Bitcoin for its strategic reserve, instead relying on confiscations to grow its holdings [6].

The volatility in crypto markets has been further amplified by shifting expectations around the timing and magnitude of rate cuts. Bitcoin briefly retreated from its all-time high following a pullback in aggressive easing bets, as reflected in falling odds on Polymarket. This dynamic illustrates the market’s susceptibility to nuanced changes in Fed communication [7].

With the upcoming release of FOMC meeting minutes, market participants are bracing for additional clarity on the Fed’s stance. These minutes are expected to influence both traditional and crypto markets, with Bitcoin and Ethereum likely to be among the most affected assets. The minutes could serve as a key catalyst in positioning ahead of the September meeting, shaping investor behavior and asset allocation [8].

Asian currencies have shown relative stability amid the waning expectation of a near-term rate cut, with the yen strengthening on robust economic data. This contrasts with the crypto market’s pronounced reaction to U.S. monetary policy, underscoring the global interconnectedness of financial markets [9].

As the Fed’s policy trajectory remains a focal point, the interplay between monetary signals and crypto prices continues to create a dynamic environment. While Bitcoin has served as a bellwether for risk-on sentiment, analysts caution against complacency. With warnings about potential overvaluation and market corrections, investors are advised to maintain a measured approach despite the bullish momentum [10].

Sources:

[1] title1.............................(https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202508170801BENZINGAFULLNGTH47174422)

[2] title2.............................(https://www.ainvest.com/news/bitcoin-sees-rise-fed-rate-cut-hopes-matt-gaetz-buys-pudgy-penguins-xrp-hits-lows-2508/)

[3] title3.............................(https://crypto.news/bitcoin-polymarket-fed-interest-rate-cut-odds-fall/)

[4] title4.............................(https://www.ainvest.com/news/fomc-minutes-powell-stance-impact-rate-cuts-crypto-markets-2508/)

[5] title5.............................(https://www.markets.com/news/market-review-interest-rate-expectations-and-tech-innovation-674-en-eu/)

[6] title6.............................(https://tradersunion.com/news/market-voices/show/440781-fed-rate-cut-sept/)

[7] title7.............................(https://bravenewcoin.com/insights/fed-rate-cut-fuel-on-the-fire-for-bitcoin-price-momentum)

[9] title9.............................(https://www.mitrade.com/au/insights/news/live-news/article-3-1045966-20250817)