Federal Reserve Chair Jerome Powell’s recent remarks have put a damper on the prospects for a rate cut in September, a move that many in the cryptocurrency market had anticipated might inject some much-needed momentum. With the likelihood of such a cut now dwindling to 40%, according to market analysts, the crypto bulls might need to temper their enthusiasm—at least for the time being.
The Fed’s Influence on Crypto
The Federal Reserve’s monetary policy has long had a ripple effect across financial markets, and the crypto sphere is no exception. Powell’s latest comments, which were more hawkish than dovish, seem to have solidified the Fed’s ongoing commitment to its current interest rate levels. This stance could mean that the cost of borrowing remains higher for longer—something that traditionally tames riskier assets like cryptocurrencies. As explored in our recent coverage of Bitcoin’s stall amid Jerome Powell succession talks, the uncertainty surrounding Fed leadership adds another layer of complexity to the market dynamics.
“Jerome Powell’s stance has definitely thrown a wrench into the works,” noted Clara Kim, a senior analyst at CryptoFocus. “A rate cut in September was seen by many as a potential catalyst for a new wave of crypto investments. Now, those hopes appear to be dwindling.”
Market’s Mixed Feelings
Reactions in the market have been varied, with some players expressing disappointment while others remain cautiously optimistic. The current sentiment appears to be one of uncertainty, with investors reevaluating their strategies in light of the Fed’s position. Bitcoin, often a bellwether for the broader crypto market, has shown signs of hesitation, oscillating within a narrow range as traders weigh the implications of a protracted period without rate cuts. This mirrors the modest market gains seen in our analysis of Ether and Dogecoin leading the charge, where Bitcoin’s stability was highlighted amid broader market movements.
Despite the apparent setback, not everyone is ready to hit the panic button. “It’s not all doom and gloom,” argued Max Tan, co-founder of crypto investment firm BlockVentures. “While a rate cut would have been a nice tailwind, the fundamentals of the crypto market remain strong. We’re seeing increased adoption and technological advancements that can sustain growth even without Fed intervention.”
Historical Context and Future Outlook
Historically, periods of low-interest rates have been fertile ground for crypto growth, as investors seek higher returns in alternative assets. The current landscape, however, is markedly different from the early 2020s when the market was awash with liquidity. Now, with inflationary pressures and global economic uncertainties, the Fed’s cautious approach is understandable, albeit frustrating for those hoping for a bullish push.
Looking ahead, the question remains: can the crypto market sustain its momentum without the Fed’s helping hand? Some believe that innovation within the sector—like advancements in decentralized finance (DeFi) protocols and layer-two scaling solutions—could provide the necessary fuel for a rally. Others, however, are taking a wait-and-see approach, mindful of potential macroeconomic headwinds.
With the next Federal Reserve meeting set for September, all eyes will be on Powell and his colleagues for any signs of a shift in policy. Until then, crypto investors may need to brace for a period of sideways trading, punctuated by pockets of volatility.
In the end, the market’s resilience will be tested. Can it forge its own path, independent of traditional monetary levers? Or will it continue to be at the mercy of broader economic trends? These unanswered questions add an element of intrigue—and risk—to the crypto landscape as we move through the latter half of 2025.
Source
This article is based on: Slower bull market ahead? September Fed rate cut chance falls to 40%
Further Reading
Deepen your understanding with these related articles:
- Bitcoin Price Calms at $118K Ahead of FOMC Meeting, BONK Dumps Hard: Market Watch
- These Economic Forces Could Help Lift Bitcoin Higher
- Bitcoin charts, market cycle history hint at 15% short-term push to $138K
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
