Fed's 25-Point Cut Priced In: Crypto Awaits Next Move for Rally

The U.S. Federal Reserve’s 25-basis-point rate cut on September 17, 2025, marked the first easing of monetary policy since December 2024, yet crypto markets responded with muted volatility, reflecting expectations that the move had already been priced in. Bitcoin (BTC) and Ethereum (ETH) saw limited price swings, with BTC trading between $115,000 and $117,000, while ETH fluctuated around $4,600. Analysts attributed the subdued reaction to the market’s high probability anticipation of the cut, with some noting that the Fed’s cautious messaging—emphasizing inflation risks and data-dependent future moves—curbed immediate optimismCrypto Markets Fail To Surge Following Fed Rate Cut Announcement^[1].

Despite the lackluster short-term response, experts highlighted the broader implications for crypto markets. Julio Moreno of CryptoQuant noted that the cut could catalyze a Q4 rally if the Fed continues easing, while Brian Huang of Glider emphasized that crypto’s performance hinges on macroeconomic indicators such as employment and inflationCrypto Markets Fail To Surge Following Fed Rate Cut Announcement^[1]. Doug Colkitt of Fogo underscored the Fed’s enduring influence, stating, “When Powell blinks, risk assets breathe, and Bitcoin inhales deeper than most,” a sentiment echoed by Thomas Perfumo of Kraken, who observed alignment between central bank projections and market expectations for rate cuts through 2026Crypto Markets Fail To Surge Following Fed Rate Cut Announcement^[1].

The Fed’s independence, particularly ahead of a 2026 leadership transition, emerged as a critical factor. Greg Magadini of Amberdata warned that the central bank’s autonomy in setting policy remains pivotal for asset prices, especially for Bitcoin and gold. Meanwhile, innovation in the crypto space was identified as a long-term driver, with Colkitt noting, “Macro is the wind, and crypto innovation is the engine. Rate cuts might kick off the next leg, but real adoption is what keeps it running over time.”Crypto Markets Fail To Surge Following Fed Rate Cut Announcement^[1]

However, risks loom large. Inflation remains above the Fed’s 2% target, and labor market data, while showing signs of softening, could trigger policy reversals if economic conditions deteriorate. Goldman Sachs CEO David Solomon dismissed speculation of a 50-basis-point cut, aligning with the CME FedWatch tool’s 92.2% probability of a 25-basis-point reductionWhy the Fed May Cut Rates Earlier Than Expected - Goldman Sachs^[6]. The firm’s economists, however, revised their forecast to include earlier cuts due to weaker-than-expected inflation and disinflationary pressures, projecting 25-basis-point reductions in September, October, and December 2025Altcoin Rally 2025 Fueled by Fed Rate Cut Hopes & Policy Clarity^[7].

The altcoin market, which reached a record $1.72 trillion valuation in 2025, also faces volatility risks. While lower rates may drive capital into riskier assets, analysts cautioned that altcoins are more susceptible to corrections than Bitcoin. The Clarity Act, which aims to provide regulatory clarity for crypto, was cited as a potential tailwind for institutional adoption and real-world asset (RWA) growth. However, liquidity constraints and macroeconomic headwinds, including stagflation concerns, could limit altcoin gainsFed Rate Cut 2025: What It Means for Crypto Investors^[3].

Retail investors were advised to adopt disciplined strategies, including diversification, leverage management, and monitoring Fed communications. The Fed’s tone during Jerome Powell’s post-meeting press conference and subsequent policy adjustments will be critical in shaping market sentiment. As one analyst noted, “The biggest driver of asset prices…revolves around the Fed’s independence,” a factor that remains uncertain as the central bank navigates its evolving role in a rapidly changing economic landscapeCrypto Markets Fail To Surge Following Fed Rate Cut Announcement^[1].