Bitcoin Updates: Fed’s Softer Stance Supports Both Economic Expansion and Inflation—Positive Momentum for Crypto
The U.S. Federal Reserve's move to lower interest rates by 25 basis points on October 29, 2025, had a significant impact on global financial markets, with digital assets such as
Prior to the announcement, crypto markets experienced heightened volatility and initially dropped as investors reacted by "selling the news," according to
The Fed's latest policy reflects mounting worries about a slowing job market and economic headwinds, even as inflation approaches the 2% target. With unemployment climbing to 4.3% and some economic indicators delayed due to a government shutdown, the central bank opted for a "measured and adaptable" easing strategy, according to analysts at
Institutional interest in cryptocurrencies remained strong.
Looking forward, investors will pay close attention to the Fed's December meeting for indications about the trajectory of further rate reductions. If a third cut occurs in 2025 alongside the official end of QT, it could further boost crypto through increased liquidity. Nevertheless, potential risks persist. A shift back to a more hawkish policy or unexpected inflation could spark renewed volatility, especially as geopolitical and regulatory uncertainties linger.
At present, the Fed's recent moves have strengthened the perception of a supportive policy environment, positioning crypto to benefit from lower yields and a weaker dollar. As one analyst remarked, "The Fed is no longer solely prioritizing inflation control but is now also addressing economic vulnerabilities—a change that may provide fresh momentum for Bitcoin and Ethereum."
