The cryptocurrency market is going through a special moment as the American Federal Reserve has just raised its rates. This decision, the first since 2023, provoked only a limited reaction on bitcoin. On Thursday, investors are watching the next steps in U.S. monetary policy and their potential effect on risky assets. Between bond yields, dollar and inflation, the context remains tense. However, crypto prices show relative stability, while some altcoins show more marked movements.
In brief
- The Fed is raising rates by 25 basis points, with a range now between 3.75% and 4%.
- Bitcoin remains stable around $76,300 despite the return of monetary tightening.
- Zcash jumped 23% and recorded growth much higher than that of the main cryptocurrencies.
- The crypto market reaches $2.63 trillion, while the fear and greed index returns to the neutral zone.
Bitcoin remains stable after expected rate hike
The Federal Reserve raised its policy rate by 25 basis points, raising its range from 3.75% to 4%. The twelve members of the Federal Open Market Committee unanimously approved this decision. Before the announcement, the CME’s FedWatch tool indicated a 93% probability for this increase. This anticipation partly explains why the crypto market reacted little in the first hours.
On Thursday, the price of bitcoin was trading around $76,300, and is hovering around $78,112 at the time of writing. It showed limited variation after the decision. The contrast appears clearly when observing the main American indices. The Dow lost about 1.2%, while the S&P 500 fell 0.4% to 0.5% on Wednesday.
Higher rates also change the balance between different financial assets. Treasuries and cash are becoming more attractive compared to assets that do not generate yield, such as cryptocurrencies and gold. Tighter monetary policy may also support the dollar, creating additional pressure on risky assets. For crypto markets, this combination therefore remains an important element to monitor.
Bond markets calm some of the tensions
The financial context had already started to tighten before the Fed’s decision. The ten-year US Treasury yield had exceeded 5% at the start of the week. It reached its highest level since 2007. At the same time, oil had crossed 100 dollars per barrel in the context of the Israeli-Iranian conflict.
However, some of that tension eased Thursday morning. Yields on long-term U.S. bonds fell by about two basis points. Stock futures were rising. The message from Fed Chairman Kevin Warsh on the fight against inflation also reassured the bond markets.
This lull helps to understand the stability of bitcoin after the rate increase. Investors had already positioned their portfolios before the decision. They then observed the evolution of yields. The situation nevertheless remains dependent on the next indications concerning American rates.
Zcash clearly stands out among cryptocurrencies
While bitcoin remains relatively stable, Zcash shows much stronger growth. ZEC gained 23% to near $1,425, a multi-year high. This increase comes after Matt Huang, co-founder of Paradigm, revealed that the company held ZECs. Paradigm has also invested in the Zcash Open Development Lab.
Matt Huang introduced Zcash as a privacy-focused complement to this asset. He defended the financing of the project development fund. This fund remains fueled by inflation. According to him, this support remains important in the face of cyber threats linked to artificial intelligence and advances in quantum computing.
The movement is part of a dynamic already visible before. In May, Zcash had increased by 37% after Tushar Jain of Multicoin Capital revealed a position built up since February. Over the last month, ZEC has gained around 160%, compared to 18.2% for bitcoin. Over twelve months, its increase reached almost 3,000%, which places it among the best performing assets of the top ten cryptocurrencies by capitalization this week.
Other major cryptos are moving forward more modestly
The main cryptocurrencies show more measured movements. BNB was trading near $724, up 2%, while Solana held slightly above $100, up 3.3%. XRP advanced 2% to $1.29, but remained down more than 6% for the week. Its weekly decline comes after the failure of the Clarity Act on cryptocurrencies during the closing vote in the Senate.
This bill would have legalized most cryptocurrency activities in the United States. It would also have brought more clarity to altcoins like Solana and XRP than to bitcoin. The evolution of the American framework therefore remains another factor monitored by market players.
Price movements were also accompanied by significant liquidations. The market liquidated around $373 million worth of crypto positions in 24 hours. A majority concerned short positions. The total capitalization of the crypto market also reached $2,630 billion, while the fear and greed index showed 50, a neutral zone.
The next step will depend in particular on indications from the Federal Reserve on its monetary trajectory. In this context, bitcoin remains sensitive to rates, bond yields and the dollar. Investors are now awaiting the next US monetary data.
According to its median projections, the federal funds rate is expected to reach 4.1% at the end of 2026, leaving an additional quarter-point margin. The next Fed meeting is scheduled for October 27-28. Until then, BTC could continue to evolve under the influence of yields, the dollar and rate expectations.
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