Fed Keeps Interest Rates Unchanged: What Does This Mean for Cryptocurrency?

In the first meeting of the Federal Open Market Committee (FOMC) since President Donald Trump took office, the U.S. Federal Reserve announced that interest rates would remain unchanged at 4.25% to 4.50%, further increasing instability in the financial and cryptocurrency markets. All traders, investors, and analysts around the world are closely watching the meeting with most expecting an interest rate cut, but the decision made has disappointed. "Recent indicators show that economic activity continues to expand at a solid pace," the Federal Reserve said in its latest release, "The unemployment rate has remained low in recent months and labor market conditions remain solid. Inflation remains high." The FOMC also revealed that they will slow down the process of reducing their securities holdings starting in April by lowering the monthly repurchase cap for Treasury securities from $25 billion to $5 billion. However, the monthly repurchase cap for agency debt and agency mortgage-backed securities will remain at $35 billion. The committee also anticipates two interest rate cuts by the end of the year. What Does This Mean for Crypto? The Federal Reserve's decision to keep interest rates unchanged signals a cautious approach to the global market. For cryptocurrencies, this has several implications: The Continuous Instability of the Market If interest rates are not cut, traditional markets may continue to be volatile while impacting risk assets such as Bitcoin and other top altcoins. From here on out, investors may be cautious while waiting for clearer signs of economic stability before making any major moves. The Power of the USD Higher interest rates tend to strengthen the US dollar, which historically puts downward pressure on the cryptocurrency market. If the Fed maintains interest rates longer, Bitcoin and other cryptocurrencies may struggle to gain momentum. Institutional Investments May Slow Down Because institutional investors view cryptocurrency as a high-risk asset, the flow of capital into cryptocurrency from traditional finance may slow down in the coming weeks. The Long-Term Price Increase Case Remains Intact Despite short-term pressures, Bitcoin is still regarded as a hedge against inflation and economic instability. The price of Bitcoin and other cryptocurrencies could rise sharply if interest rate cuts eventually occur in the next FOMC meeting. Enhance Focus on Stories About Cryptocurrency Due to the lack of an immediate liquidity injection, cryptocurrency investors may shift their focus to the latest news such as AI Agents, ETF approvals, and on-chain developments to drive growth momentum. Although not cutting interest rates may dampen short-term bullish sentiment, the long-term fundamentals of cryptocurrency remain strong. Now, macroeconomic developments will play a crucial role in driving the cryptocurrency market forward in the coming weeks.