Bitcoin Reaction to Fed Rate Cuts & 2025 Outlook
Delphi Digital’s analysis of 2019, 2020 and 2024 Fed rate-cut cycles shows Bitcoin typically rallies ahead of cuts before giving back gains. In 2019, BTC climbed from $3,000 to $13,000 before three cuts in July–October, then pulled back as economic weakness emerged. The 2020 emergency cut led to a joint equities crash and subsequent rebound under massive liquidity. In 2024, political narratives, record spot ETF inflows and corporate purchases from MicroStrategy extended Bitcoin’s post-cut rally. Looking to the first anticipated Fed rate cut in September 2025, Bitcoin has consolidated since late August with ETF flows slowing and corporate buying easing. A sharp pre-meeting rally could trigger a “sell the news” correction. Conversely, a stable or weakening trend into the FOMC meeting may support a measured rebound after the cut. Traders should monitor liquidity flows, ETF inflows and corporate demand. Even if Bitcoin rebounds, Delphi Digital expects a lower high near $118,000–$120,000, with a potential late-2025 rally if liquidity recovers.
Neutral
Delphi Digital’s analysis suggests Bitcoin’s price will be driven by the timing and magnitude of ETF inflows, corporate demand and liquidity ahead of the September 2025 Fed rate cut. If Bitcoin spikes before the cut, a sell-the-news reaction could trigger short-term pullbacks, while a quieter build-up may allow for a modest rebound. Combined with forecasts of a capped high near $118,000–$120,000, these dynamics imply limited directional conviction and range-bound trading. Therefore, the expected impact is neutral as gains are likely offset by profit-taking and market balance.