Bitcoin News Today: Fed Rate Decision Could Send Bitcoin to $140,000 Amid Bullish Outlook

Markets are on high alert as the U.S. Federal Reserve prepares to announce its decision at the latest Federal Open Market Committee (FOMC) meeting. While a rate cut is unlikely, speculation persists that a surprise reduction below the current 4% benchmark could fuel a surge in Bitcoin prices, potentially pushing the cryptocurrency toward $140,000 [1]. The Fed’s decision is being closely watched for signals on the future of monetary policy and its potential impact on risk assets.

The economic backdrop has been unexpectedly favorable, with the U.S. economy expanding at a 3% annualized rate in the second quarter. This growth followed a significant rise in imports ahead of the Trump administration’s global trade policies. Meanwhile, the probability of a 2025 U.S. recession has dropped sharply to 17%, down from a peak of 66% in May [1]. These developments suggest a more stable and resilient economy, which has reduced the urgency for immediate rate cuts.

Inflationary pressures have also eased. The June Producer Price Index (PPI) showed a year-over-year increase of just 2.3%, the lowest since September 2024 [1]. Although import tariffs have had minimal effects on consumer prices, Fed officials remain cautious about the potential downstream impacts of trade policies. President Trump has publicly pushed for immediate rate cuts, arguing that such a move would stimulate economic activity and make it easier for consumers to refinance homes. However, Fed Chair Jerome Powell has given no indication of changing course this week [1].

For Bitcoin investors, the possibility of a rate cut is a key factor in assessing market direction. Bitcoin typically benefits from looser monetary policy, especially when macroeconomic conditions are stable and liquidity is abundant [1]. A reduction in the Fed’s benchmark rate could diminish the appeal of the $25.4 trillion government and corporate bond markets, redirecting capital toward high-yielding and risk-on assets like Bitcoin and the S&P 500. However, the impact of rate cuts is often gradual and depends on broader money supply trends, such as the growth of M2 [1].

A cut to 3.75% could encourage investors to shift away from fixed income, particularly as yields shrink. This shift would likely benefit risk assets, including Bitcoin, which has historically performed well during periods of economic stability and growing liquidity [1]. A $140,000 Bitcoin price would represent a 19% rise from the current level of $117,600, implying a $2.78 trillion market capitalization—still 87% below gold’s valuation. For context, Nvidia, the world’s most valuable company, has a market cap of $4.36 trillion [1].

While the likelihood of a surprise cut is low, the potential consequences for Bitcoin remain significant. If the Fed signals a more accommodative monetary environment, it could encourage risk-taking and further boost liquidity-driven assets. Analysts suggest that while a $140,000 price tag for Bitcoin is ambitious, it is not beyond the realm of possibility under the right conditions [1].

Source: [1] Fed Rate Decision Will Determine Direction of BTC Price (https://cointelegraph.com/news/fed-rate-decision-incoming-would-a-surprise-cut-send-bitcoin-to-dollar140k)