Fed holds rates as two officials push for a hike, leaving bitcoin near ETF buyers' cost
The 10-2 vote keeps a December increase in play. Analysts point to a heavy layer of coins bought above $85,000 that could slow any recovery.
The US Federal Reserve kept interest rates unchanged on Wednesday, but the vote showed that some officials want to tighten policy again. Bitcoin held steady after the decision.
What happened
The Fed voted 10 to 2 to leave rates where they are. The two dissenters, Governor Lisa Cook and Cleveland Fed President Beth Hammack, wanted to raise rates. That split keeps a rate increase in December on the table.
Around $11 billion in bitcoin options were set to expire on Friday, about a third of all bitcoin options on Deribit, the largest crypto options exchange.
On-chain analytics firm Glassnode said bitcoin is trading close to the average price paid by holders of US spot bitcoin ETFs. It also pointed out that around 4 million BTC was bought above $85,000, which could cap a recovery.
Background
Higher interest rates make safe assets such as government bonds more attractive and tend to weigh on riskier ones, including crypto and technology stocks. That is why traders watch Fed decisions closely, and why dissenting votes for a hike matter even when rates do not change.
Large amounts of coins bought at higher prices can act as a ceiling. When the price climbs back toward what they paid, many holders sell to break even, adding supply just as the market tries to rise.
Why it matters
Bitcoin sits at a sensitive point. If it trades below what ETF investors paid, some of them are holding losses, which can lead to selling.
The December Fed meeting and the level around $85,000 are now the markers to watch.
Written by Tech Security with AI assistance. Not financial advice. See our disclaimer.