The Federal Reserve left rates alone on Wednesday, as nearly everyone expected. The target range stays at 3.75% to 4%, but the vote was 10 to 2. Both dissenters wanted a quarter-point hike. The split matters because the Fed raised rates unanimously in September, and the minutes of that meeting showed most participants thought another increase would probably be appropriate before the end of 2026, depending on data. Traders have already adjusted. A month ago markets gave a hike about 70.9% odds. Ahead of this meeting, that had dropped to 9.4%.
At his press conference, Chair Kevin Warsh said politics played no part in the decision, with the midterm elections days away. He has also said he does not favor forward guidance unless there is a crisis, which leaves investors to interpret the data on their own.
Bitcoin's response was restrained. The price jumped to about $81,700 within minutes of the announcement, dipped below $80,500, then drifted back toward $81,000. The setup before the announcement was crowded. Bitfinex said leverage had reached a five-week high going into the decision, and more than $38.82 million in short positions were liquidated within 15 minutes as bitcoin moved above $81,500. The same report offers a cautionary pattern from past meetings. Bitcoin has averaged a 0.9% gain on Fed decision days, followed by a 0.6% loss over the next five sessions.
Fund flows have turned around after a rough stretch. U.S. spot Bitcoin ETFs lost about $773.5 million on October 22 and 23 alone, according to Farside data. They then drew $110 million on October 26 and $176 million on October 27.
A much longer-term call also landed this week. Bitwise raised its ten-year bitcoin forecast from $1.3 million to $1.6 million by 2036, which implies a compound annual growth rate of 34.3%. Its market-share assumptions did not change. The firm instead enlarged its estimates for the global store-of-value market, from $91 trillion to $110 trillion, and for institutional investment assets, from $216 trillion to $303 trillion. The base case is not the whole picture. Bitwise's bear case is $130,686 by 2036 and its bull case is $3.67 million. That range is wide enough to show how much of the forecast rests on assumptions.
The next date on the calendar is Friday. CryptoTicker's analysis noted that more than $11.1 billion in bitcoin options expire two days after the Fed decision, an event that often adds to short-term price swings.
