With interest rate hikes of 25 basis points, why did crypto strengthen against the market?

According to Woofun AI, Federal Reserve Chairman Kevin Walsh announced the first rate hike since 2023, but the crypto market was not pressured, and Bitcoin (BTC) bucked the trend. The core of this counterintuitive market reaction is that investors are repricing policy paths rather than simply focusing on changes in interest rate values.

Policy details reveal the source of market optimism. The Federal Reserve raised the target interest rate by 25 basis points in the range of 3.75%-4%. Although Walsh emphasized that inflation “lasted too long and was too high” and there was no significant improvement in recent data, the “bitmap” sent a key signal: the median policy interest rate at the end of 2026 and 2027 was 4.1%.

This means that after this 25 basis point increase, the austerity cycle may be coming to an end without further sharp interest rate hikes. This kind of expectation management effectively mitigated market concerns about long-term high interest rates and provided support for risky assets.

Asset price performance confirms this logic. Bitcoin (BTC) rose to $76,621, up 0.88% in 24 hours and 0.60% during the day; Ethereum (ETH) rose 1.1% to $2,444.36; and SOL rose 2% to $100.57. Traditional markets strengthened at the same time: Nasdaq 100 futures rose 1.04%, S&P 500 futures rose 0.81%, gold rose 1.02%, silver rose 1.52%, and the US dollar index (DXY) fell 0.17%. The two-year US Treasury yield fell 2 basis points to 4.71% from its 2024 high on the previous trading day.

According to data compiled by Woofun AI, 94 tokens in the CoinDesk 100 index rose. Among them, the CoinDesk 80 index, which consists of small-cap stocks, rose 4.7%, while the CoinDesk 5 index, which is dominated by Bitcoin, rose only 1.2%, showing speculative varieties leading the way.

However, the flow of funds has yet to be completely reversed. The US Bitcoin Spot ETF had a net outflow of $295.98 million on Wednesday, compared to $450.33 million the day before, according to SosoValue data. Since September 8, the cumulative outflow in seven trading days has exceeded 1 billion US dollars, and the ETF's net assets have dropped to 95.19 billion US dollars. The current Bitcoin price is still 6.9% below the monthly high of $82,284 set on September 4. This indicates that despite a short-term rebound in prices, the cautious attitude of institutional funding has not changed, and the basis for market recovery is not yet stable.