After the recent correction, crypto investors are hoping for a trend reversal driven by falling interest rates. But how much does Fed policy actually matter for Bitcoin? On September 17, 2025, the next interest-rate decision by the U.S. Federal Reserve is scheduled. Odds are good that, after a long pause, a rate cut is coming. But are rates really that decisive for the Bitcoin price? A long-term analysis shows how their trajectory has affected BTC in concrete terms.
In 2022, the Fed under Chair Jerome Powell began aggressive rate hikes to bring rising U.S. inflation under control. At its peak, inflation reached 8.0%, the highest level in 40 years. The continuous hikes between March 2022 and July 2023—from 0.25–0.50% up to 5.25–5.50%—had an effect: inflation was contained to around 3%. Powell’s stated 2% goal, however, has not yet been reached.
Fed: First Rate Cut Expected in 2025
After a longer pause, the Fed could deliver its first cut since December 2024 at the September 17, 2025 meeting. According to U.S. President Donald Trump, a rate cut is long overdue. He expects a strong effect on the economy and publicly listed companies.
The President has made no secret that he would prefer much more aggressive cuts than Powell has been willing to implement. He has been openly dissatisfied with the Fed’s stance and is at loggerheads with Powell—whose term does not end until May 2026.
Trump’s pressure nonetheless seems to be having an effect. Analysts put the probability very high that rates will be cut by at least 25 basis points in September. The CME Group’s FedWatch Tool puts the odds of a cut to a 4.00–4.25% corridor at around 97%. Only about 2% of analysts expect another pause (as of September 4, 2025).
Will Bitcoin Rise on September 17, 2025?
Should crypto investors circle September 17 on their calendars? A possible rate cut could be the perfect opportunity to buy Bitcoin before the price is catapulted higher by the catalyst. After the recent drop below $108,000, BTC might once again reach for new all-time highs.
But is that really true? Are rate cuts actually as bullish for BTC as public debate suggests? A comprehensive analysis shows how BTC has developed following past rate decisions—and how hikes as well as cuts have affected prices.
Bitcoin’s First “Rate Effect” in 2015
In Bitcoin’s early years, Fed policy had no discernible impact on BTC. After the 2008/2009 financial crisis, the Fed kept rates at zero for years to stabilize markets.
A rate turn only came on December 16, 2015. The Fed delivered its first 25 bp hike at a time when Bitcoin had already been trading for several years. BTC reacted with a daily loss of –2.38%, according to the BTC/USD index for that trading day.
However, the price had risen significantly in the weeks before the decision—even though hikes are typically viewed as negative for risk assets like stocks or crypto, since higher fixed-rate returns make riskier allocations less attractive.
Rate Hikes 2015: No Lasting Effect on Bitcoin
From late November to mid-December 2015, BTC rose by nearly 50% at the peak. In the weeks and months after the hike, Bitcoin fell about 24% over one month, but the three-month decline narrowed to about 10%. The correction was not particularly lasting.
On December 14, 2016, the next hike took rates to 0.50–0.75%. BTC barely reacted that day (–0.01%). In the month before, as in 2015, BTC had already risen—this time by about 10%. In the weeks after, the price continued to climb. Fed policy was not negative this time; other drivers, like the 2016 halving, likely contributed to the 2017 bull run.
Through December 2018, the Fed added seven more hikes, reaching 2.25–2.50%. Effects on BTC:
Rate Hikes from 2015 to 2018
- Dec 16, 2015
Month before: +46%
Decision day: –2%
Month after: –24%
Three months after: –11% - Dec 14, 2016
Month before: +10%
Decision day: –0.01%
Month after: +5%
Three months after: +60% - Mar 15, 2017
Month before: +26%
Decision day: +1%
Month after: –6%
Three months after: +91% - Jun 14, 2017
Month before: +37%
Decision day: –10%
Month after: –20%
Three months after: +33% - Dec 13, 2017
Month before: +178%
Decision day: –5%
Month after: –15%
Three months after: –44% - Mar 21, 2018
Month before: –20%
Decision day: –0.1%
Month after: –0.1%
Three months after: –24% - Jun 13, 2018
Month before: –28%
Decision day: –4%
Month after: –1%
Three months after: +3% - Sep 26, 2018
Month before: –4%
Decision day: +0.3%
Month after: –0.5%
Three months after: –41% - Dec 19, 2018
Month before: –22%
Decision day: +0.4%
Month after: –1.5%
Three months after: +8%
Bitcoin Rises Multiples Despite Rate Hikes
- In the month before a hike, BTC rose slightly more often than it fell (5 of 9).
- Decision day itself showed little relevance; in most cases, BTC barely moved. Only once in 10 cases was there a ±10% swing; usually intraday moves were minimal.
- In the month after a hike, BTC fell in the vast majority of events (8 of 9).
- However, this “rate effect” did not last. Three months after a hike, BTC was already higher in a slight majority (5 of 9)—sometimes significantly—likely also influenced by other events (e.g., the halving).
Overall, Fed hikes did not sustainably push BTC lower. Effects, if any, were short lived. This contrasts with the common view that hikes are “poison” for markets. For Bitcoin in 2015–2018, that was not the case: at the first hike, 1 BTC was about $450; after the last hike in that cycle, it was around $3,700—many times higher.
First Phase of Rate Cuts for Bitcoin
What about cuts—are they really a booster for BTC? Starting in summer 2019, the Fed reversed course and began cutting rates.
The first 25 bp cut, to 2.00–2.25%, came on July 31, 2019. BTC was bullish that day, gaining over 5%. The month before, however, BTC had fallen 10%. In the month after, BTC lost 5%, and over three months declined 10%—no truly positive effect from the cut.
Another 25 bp cut followed on September 18, 2019. BTC barely reacted on the day, and had been flat in the prior month. In the month after, BTC fell over 20%; over three months, –35%. No positive rate effect there.
By March 2020, the Fed cut rates back to zero to stabilize markets during the pandemic, keeping them there until 2022.
Effects of Rate Cuts on BTC
- Jul 31, 2019
Month before: –10%
Decision day: +5%
Month after: –5%
Three months after: –10% - Sep 18, 2019
Month before: –0.75%
Decision day: –0.3%
Month after: –21.5%
Three months after: –35% - Oct 30, 2019
Month before: +10%
Decision day: –3%
Month after: –18%
Three months after: +1% - Mar 3, 2020
Month before: –5%
Decision day: –2%
Month after: –23%
Three months after: +9% - Mar 15, 2020
Month before: –48%
Decision day: +3%
Month after: +24%
Three months after: +75%
Rate Cuts: Bitcoin Price Still Halved
- The month before cuts was mostly negative for BTC (4 of 5).
- Decision day itself, as with 2015–2018 hikes, had little relevance.
- In the month after cuts, BTC mostly fell (4 of 5).
- Over three months, the picture was mixed—distorted by pandemic-driven volatility.
- At the start of the cutting cycle, BTC was around $10,000; by the end, about $5,000—halved despite multiple cuts.
High Inflation: Fed Hikes Aggressively
Amid Russia’s war in Ukraine and record U.S. inflation, the Fed again pivoted in March 2022, hiking in eleven steps to 5.25–5.50%, with some moves of 50 or even 75 bp—the highest rates in over 20 years. BTC’s reaction:
- Mar 16, 2022
Month before: –10%
Decision day: +4.5%
Month after: –1.5%
Three months after: –48% - May 4, 2022
Month before: –18%
Decision day: +5%
Month after: –25%
Three months after: –43% - Jun 15, 2022
Month before: –26%
Decision day: +2%
Month after: –7%
Three months after: –11% - Jul 27, 2022
Month before: +11.5%
Decision day: +8%
Month after: –6%
Three months after: –4% - Sep 21, 2022
Month before: –13%
Decision day: –2%
Month after: +3%
Three months after: –9% - Nov 2, 2022
Month before: +6%
Decision day: –1.5%
Month after: –16%
Three months after: +17% - Dec 14, 2022
Month before: +10%
Decision day: +0.2%
Month after: +17%
Three months after: +35% - Feb 1, 2023
Month before: +40%
Decision day: +2.5%
Month after: 0%
Three months after: +21% - Mar 22, 2023
Month before: +13%
Decision day: –3%
Month after: –0.2%
Three months after: +9% - May 3, 2023
Month before: +3%
Decision day: +1%
Month after: –5%
Three months after: 0% - Jul 26, 2023
Month before: –3.5%
Decision day: +0.4%
Month after: –11%
Three months after: +17%
Despite Record Rates, Bitcoin Is Relatively Resilient
- In the month before hikes, BTC fell five times and rose six—no clear pattern.
- Decision day produced >5% moves only once; generally low relevance.
- In the month after hikes, BTC was negative in 8 of 11.
- Over three months, effects were no longer clear: five down, five up, one flat.
- Overall, hikes did not push BTC dramatically lower. After 11 hikes, BTC was ~$30,000 versus ~$40,000 at the start—a ~25% drop—yet BTC was already showing strong growth toward the end of the hiking phase.
New pivot, limited credit
The first cut of the new cycle landed on September 18, 2024: –50 bps. Bitcoin popped about 2% on the day, was up ~3.5% over the prior month, then added ~12% in the next month and ~77% over three months. Still, politics likely mattered more than policy—Trump’s election was a bigger tailwind than the fed funds tweak.
Two more cuts followed. On November 7, BTC barely budged intraday (~+0.4%), but it had rallied ~22% into the meeting and climbed 31% over the next month (+27% in three). December 18 was messier: BTC fell ~5.5% that day, then +4% over a month, and –18% over three. Net-net, the cycle began just under $62k and, by the third cut, Bitcoin was orbiting $100k.
The bigger takeaway
The “rate effect” is overstated. In 2015–2018, during hikes, BTC multiplied. In 2019–2020, during cuts, it halved. In 2022–2023, hikes coincided with roughly a 25% drawdown—then BTC strengthened as the cycle flipped.
Context does the heavy lifting: halvings, spot-ETF approvals, and U.S. politics juiced the upside; COVID, the FTX collapse, and the war in Ukraine did the opposite. And the decision day itself? Usually a non-event for BTC. Don’t expect an instant jolt from the September 17, 2025 meeting—if policy matters, it tends to show up over weeks, not hours.
