Analysts cited by CoinDesk say Bitcoin could benefit if the Federal Reserve delivers any dovish signal at Wednesday’s policy meeting, even as markets remain sharply divided on the rate decision itself. CME FedWatch data shows a 70% probability that the Fed will leave rates unchanged and a 30% probability of a surprise 25-basis-point hike.
Block Scholes analyst Thahbib Rahman said reduced use of forward guidance by Fed Chair Kevin Warsh has added to uncertainty, making this FOMC meeting one of the most uncertain in years. Rahman said any dovish signal could help Bitcoin extend its relative outperformance.
The report also pointed to diverging market performance in July. Bitcoin is up about 6% so far this month, while the S&P 500 is roughly flat and the semiconductor sector has fallen nearly 20%. Still, K33 Research head of research Vetle Lunde said the impact of this week’s FOMC meeting on BTC may be limited, arguing that Bitcoin’s correlation with equities has weakened as the Nasdaq had been strong and positioning became stretched while BTC continued to consolidate near multi-year lows.
Bitcoin could get a lift if the Federal Reserve delivers any dovish signal at Wednesday’s meeting, according to analysts quoted by CoinDesk.
Markets remain split on whether the Fed will raise rates. CME FedWatch data shows a 70% chance that rates stay unchanged and a 30% chance of a surprise 25-basis-point increase.
Analysts flag unusually high uncertainty around this FOMC meeting
Block Scholes analyst Thahbib Rahman said reduced use of forward guidance by Fed Chair Kevin Warsh has increased uncertainty, making this FOMC meeting one of the most uncertain in years.
Rahman said, "Any dovish signal could help Bitcoin continue to outperform."
Bitcoin and equities have diverged in July
The report said Bitcoin is up about 6% so far in July, while the S&P 500 is roughly flat and the semiconductor sector has fallen nearly 20%.
Vetle Lunde, head of research at K33 Research, said the Nasdaq had been strong and positioning had become stretched, while Bitcoin continued to consolidate near multi-year lows. With the correlation between the two weakening, he said this week’s FOMC meeting may have only a limited effect on BTC.
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