Crypto market edges higher as fed delivers first rate cut

September 18, 2025 (MLN): The global crypto market cap climbed 2% to $4.2tr on Thursday, lifted by Bitcoin’s steady push toward $118,000 after the Federal Reserve delivered its first interest rate cut of the year.

Gains were restrained, however, as investors weighed the Fed’s cautious outlook on monetary policy.

Bitcoin was last up 1% at $117,426. Ether advanced 2.8% to $4,609, while XRP added 2.9% to trade at $3.10.

The Fed on Wednesday voted 11–1 to lower its benchmark lending rate by 25 basis points to a range of 4.00%–4.25%.

Newly appointed governor Stephen Miran cast the sole dissenting vote, favoring a deeper half-point cut.

Futures markets had already priced in the move, with CME’s FedWatch tool showing a 96% probability of a quarter-point reduction ahead of the decision.

Analysts said that advance positioning created a “buy the rumour, sell the news” environment, muting the immediate impact across risk assets.

Fed Chair Jerome Powell described the cut as a precautionary “risk-management” measure, adding that policymakers were not rushing into an easing cycle.

His cautious language cooled expectations for aggressive rate reductions, limiting short-term enthusiasm in crypto markets.

Andrew Forson, president of DeFi Technologies, said lower borrowing costs would eventually support digital assets.

“A lower cost of capital indicates more capital flows into the digital assets space because the risk hurdle rate for money is lower,” he explained, noting that staking products and blockchain projects could become appealing alternatives to traditional bonds.

For now, the crypto response has been subdued. Bitcoin futures open interest held steady, with no signs of liquidation cascades following the Fed’s decision.

Traders remain focused on incoming economic data and the central bank’s October meeting to gauge whether the cut marks the start of a broader policy shift.

History suggests rallies may take time to build. After a December 2024 rate cut, Bitcoin briefly spiked before consolidating, with stronger gains emerging only weeks later. Analysts like BitMine’s Tom Lee still see potential for “monster gains” in Bitcoin and Ether over the next quarter if the Fed continues to ease.

Until then, crypto traders appear content to wait balancing improved sentiment with Powell’s warning against moving too quickly.

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