Major Cryptocurrencies Recover Following Fed Decision

Major cryptocurrencies have reversed overnight losses, with analysts asserting that Wednesday’s Fed decision highlighted President Trump’s growing influence over the central bank, strengthening the long-term bullish case for crypto.

The Fed kept the benchmark interest rate steady at 4.25% as expected, and Chairman Jerome Powell dampened prospects of renewed rate cuts from September, emphasizing that the central bank is focused on controlling inflation—not on government borrowing or home mortgage costs that Trump wants lowered.

Powell’s comments rocked the crypto market, with bitcoin (BTC) falling to $116,000. XRP, ether (ETH), and solana (SOL) also fell, shaking out leveraged bets from futures markets.

These losses, however, have been reversed. As of the time of writing, BTC was trading at $118,400, with XRP and ETH changing hands at $0.00314 and $3,870, according to CoinDesk data. The CoinDesk 80 Index, a broader market gauge, hovered near 915 points, up 0.8% over the past 24 hours.

Jimmy Yang, co-founder of Orbit Markets, noted that the overnight Fed decision revealed a threat to the Fed’s independence. While the central bank held rates steady, two policymakers—Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, both appointed by President Trump—dissented, favoring a rate cut.

Trump has repeatedly criticized Powell for keeping interest rates elevated and costing the United States billions of dollars. Both Waller and Bowman have also publicly advocated for rate cuts in recent weeks.

Yang stated, “There are increasing concerns about the Fed’s independence as two of Trump’s appointees voted for a rate cut last night; this should strengthen the case for crypto in the long term.” He added that with no immediate rate cut in sight, the market could continue to trade largely directionless, awaiting new catalysts—the July CPI release.

“CPI is likely to rise when the tariffs kick in over the next few months. Cryptocurrencies might initially sell off alongside broader risk assets. However, if inflation fears persist, crypto might rebound as a hedge narrative re-emerges, especially for bitcoin,” Yang added.

Greg Magadini, director of derivatives at Amberdata, said that while the Fed’s decision met expectations, concerns about the Fed’s independence linger. “The biggest looming question this year for the bond market is around Fed independence. Wednesday’s decision helped the Fed defend its independence. However, if Powell is fired or begins to cut rates too early, I expect hard assets (especially BTC) to rally significantly. At the same time, inflation and bonds would likely lose considerable value,” Magadini commented. “Today, the U.S. credit markets rely on Fed independence.”

Magadini explained that bond markets continue to price in long-term inflation, which weakens the case for rapid fire rate cuts to ultra-low levels as desired by Trump. “We’ve seen long-bond yields rise significantly since Trump’s election. The 10s30s spread moved from 15bps to 55bps, and 2s10s moved from 5bps to 45bps. This means the bond market continues to price in long-term inflation, especially given that ‘real yields’ are historically positive… should inflation remain where it is today.”