Bitcoin and Ether Slip into Choppy Trading as Fed Signals Cautious Path After Rate Cut
- Fed cuts rates by 0.25% to 3.5%–3.75% but signals a cautious, data-dependent path for any further easing.
- Bitcoin and ether trade choppily, with BTC now around US$90K (AU$135K), down 2.6% on the day.
- “QE-lite” T-bill buying and mixed Fed signals leave markets split on how much upside remains for risk assets like crypto.
The good ol’ Fed cut interest rates by 0.25%, but made it clear it is in no rush to cut again. A sort of ambiguous message that rocked Bitcoin (BTC) and Ethereum (ETH) around.
The FOMC lowered the federal funds rate to a 3.5%–3.75% range in a split vote. Two officials didn’t want any cut, and one wanted a bigger 0.5% move.
Markets first reacted positively to the cut, then pulled back once traders focused on the Fed’s wording: it said it will “carefully assess incoming data” before doing more, which is the kind of language it uses when it is close to pausing.
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Even so, FedWatch places a 40% chance of another 0.25% cut by March, so the door is not closed. While this was playing out, Bitcoin swung between about US$93,200 (AU$140,479) and US$91,700 (AU$138,231) and ether between roughly US$3,340 (AU$5,034) and US$3,440 (AU$5,185), with other majors like SOL, XRP, and BNB also chopping around rather than trending.
At press time, Bitcoin is trading at US$90K (AU$135K), a 2.6% decrease in the last 24 hours, according to CoinGecko.
Source: TradingView.
What Does This Mean?
The Fed also said it will restart buying Treasury bills, starting with US$40 billion (AU$60.3 billion) on Dec. 12. That kind of reserve-management buying is sometimes called “QE-lite” because it adds liquidity without being a full-scale quantitative easing program.
The market looks split, as some are saying the decision was less hawkish than feared, which explains the initial relief in bitcoin and stocks, but note that projections for only one rate cut next year are weaker than markets wanted and add uncertainty.
Others are more bullish and frame this cut as the start of easier money, arguing that cheaper capital tends to find its way into risk assets like crypto over time.
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