Fed Rate Cut Looms: What It Could Mean for Bitcoin’s Short- and Long-Term Outlook

At a time when global markets are eagerly awaiting the US Federal Reserve, an interest rate cut is imminent.

On September 17th, 2025, the Federal Reserve (Fed) could cut interest rates by 25 basis points – with a 94 percent probability according to the CME FedWatch tool. But how will this affect Bitcoin? A look at the past and current expert opinions show what investors can expect.

Short-term uncertainties and market reactions

The Fed is balancing inflation control with labor market stability. With core inflation above 3.1 percent and a revised labor market contraction of 911,000 jobs, the situation is tense. The S&P 500, gold, and Bitcoin are near all-time highs, fueling expectations of loose monetary policy. On platforms like Myriad, the chance of a quarter-point cut is 88 percent.

But experts like Peter Chung of Presto Research emphasize that Fed Chairman Jerome Powell’s speech and the dot plot showing the Fed’s interest rate forecasts could be decisive. A conservative stance from Powell could trigger selling pressure, while aggressive cut plans could boost risk assets like Bitcoin. Derek Lim of Caladan warns of overvalued markets at risk from speculative bubbles.

Long-term opportunities for Bitcoin

Historically, Bitcoin has a mixed short-term performance following interest rate cuts, but over a three-month period, the outcome is positive 62 percent of the time, with an average gain of 16.5 percent. The S&P 500 consistently closed higher one year after interest rate cuts near all-time highs, as The Kobeissi Letter points out.

Long-term experts are bullish on Bitcoin: HashKey Capital forecasts $700,000 by 2035, based on 10 percent annual gold price growth. Bitcoin, as “digital gold,” could catch up here. Despite possible weakness in September, Sean Dawson of Derive sees rally potential through the end of the year, even with seasonal volatility. At least three more quarter-point cuts by 2027 could support the uptrend.

In summary: The interest rate cut could make Bitcoin volatile in the short term, but the long-term potential is enormous. Investors should closely monitor Powell’s signals and diversify their portfolios. In a world of economic uncertainty and the AI ​​boom, Bitcoin remains exciting. It’s currently trading at around $115,000 – an entry point for long-term investors?

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(Featured image by Traxer via Unsplash)

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