Crypto Market Responds to Fed Interest Rate Hike
The crypto market has responded to the Federal Reserve’s decision to raise the benchmark interest rate by 25 basis points (bps) to a range of 3.75 per cent to 4.00 per cent. Bitcoin (BTC) actually moved upwards from approximately $75,400 prior to the announcement to around $76,000 following the Federal Open Market Committee (FOMC) decision on Thursday (17/9).
This increase is the first undertaken by the Fed since 2023 and was widely anticipated by the market. Consequently, the price reaction of crypto assets is not solely determined by the direction of interest rates, but also by pre-existing expectations, capital flows, sentiment, and developments within the crypto industry.
Indodax Chief Marketing Officer, Aloysia Dian, noted that the relationship between macroeconomic policy and crypto asset prices is not always direct. According to her, part of the impact of the interest rate hike may have already been reflected in prices before the decision was announced because the market had anticipated it.
“Interest rate policy remains an important factor, but it is not the only driver of the crypto market. Price reactions are also influenced by pre-existing expectations, capital flows, sentiment, and specific developments in the crypto industry. In this condition, the interest rate hike was widely anticipated, so some of its impact was likely reflected in prices before the decision was announced,” said Aloysia on Friday (18/9/2026).
Although Bitcoin strengthened after the FOMC decision, the direction of the Fed’s next policy remains a focus for the market. Recent projections show that the majority of Fed officials still see the possibility of further interest rate hikes through the end of 2026.
The Fed also raised its 2026 inflation projection to 3.7 per cent from the previous 3.6 per cent. On the other hand, the 2026 economic growth projection was raised to 2.3 per cent.
The Fed’s focus remains on controlling inflation, while the direction of future policy will depend on economic data developments. For the crypto market, these conditions necessitate viewing US monetary policy alongside factors such as liquidity, capital flows, market sentiment, and industry developments.
Aloysia stated that Bitcoin’s strengthening after the FOMC decision should be viewed within the context of broader market conditions.
“The strengthening of Bitcoin after the FOMC needs to be seen as part of broader market dynamics, rather than a sign that all risks have subsided. Investors still need to closely monitor inflation trends, future Fed policies, institutional capital flows, and global liquidity conditions,” she added.
In addition to US monetary policy, the crypto market also faces industry-specific factors, such as Bitcoin ETF flows, digital asset regulatory developments, market sentiment, and leverage positions. These factors can influence the movement of crypto assets differently compared to other risky assets.
Indodax reminded investors not to make decisions based solely on short-term price reactions. Risk profiles, position management, and independent research remain essential considerations in crypto asset trading activities.