When the Federal Reserve announced a 0.25 percentage point cut to interest rates on December 10, 2025, bringing the target range down to 3.50–3.75%, Bitcoin barely blinked. The world’s largest cryptocurrency held its ground above $92,000, showing remarkable stability despite the major policy shift that sent ripples through traditional markets.
The Fed’s decision reflected concerns about employment risks and moderate economic expansion, though inflation remained elevated. Three committee members disagreed with the move – two wanted no change while one pushed for a bigger 50 basis point cut. This split showed the tricky balance policymakers face in today’s economic climate.
Traditional markets reacted predictably to the rate cut news. Treasury yields dropped as investors bet on more cuts ahead. The dollar weakened against other currencies, and stocks climbed higher with a clear risk-on mood taking hold.
Financial and interest-sensitive sectors led the charge as traders repositioned for a softer monetary policy environment.
Bitcoin’s steady performance stood out amid this market shuffle. Trading volumes picked up as crypto participants processed the macro news, but volatility remained surprisingly tame. The digital asset even showed brief correlation with equities, suggesting some risk-on flows found their way into crypto alongside traditional investments.
Several factors explain why lower interest rates can support Bitcoin prices. When borrowing costs fall, non-yielding assets like Bitcoin become more attractive compared to interest-bearing alternatives. Think of it like choosing between a savings account paying less interest and holding an asset with growth potential – the choice becomes easier.
The weaker dollar also played a role, as international investors often view Bitcoin as a hedge against currency fluctuations. Meanwhile, easier financial conditions gave leveraged crypto traders more room to operate without worrying about margin calls. Bond prices moved inversely to the interest rate adjustment, creating additional portfolio rebalancing opportunities that may have benefited alternative assets.
Market structure in crypto remained healthy after the announcement. Major exchanges handled increased trading volumes smoothly, while on-chain data showed no signs of panic selling. Exchange balances stayed stable, and institutional demand remained steady according to custody providers. The Fed committee emphasized its commitment to maximum employment and the 2% inflation target while maintaining flexibility in future policy adjustments.
This resilience suggests Bitcoin has matured as an asset class, capable of weathering major policy announcements without dramatic price swings.
