Bitcoin traders shrugged off the Federal Reserve’s first rate increase in over three years, with the cryptocurrency holding above $76,600 as investors focused instead on the central bank’s decidedly dovish guidance. The Fed’s decision to raise rates by 25 basis points came paired with projections suggesting only one additional hike through 2027—a signal that the tightening cycle may be winding down faster than previously expected.
According to reporting by CoinDesk, Bitcoin climbed 0.88% over 24 hours to $76,621, while the broader crypto market participated in a wider rally across risk assets. The move marks a tactical shift: earlier in the week, digital assets had traded independently of traditional equities, but Thursday’s action saw crypto follow along as stocks and commodities surged on the Fed’s guidance.
The dovish surprise that moved markets
Federal Reserve Chair Kevin Powell acknowledged that inflation remained “too high for too long,” yet the committee’s “dot plot” forecast revealed the real news traders wanted to hear. A median policy rate projection of 4.1% at the end of both 2026 and 2027 effectively priced in just one more 25 basis-point move and no sustained tightening cycle.
That signal resonated across markets. The Dollar Index fell 0.17%, while equity index futures climbed—Nasdaq 100 futures gained 1.04% and S&P 500 futures rose 0.81%. Treasury yields compressed, with two-year yields dipping 2 basis points to 4.71%. Bitcoin benefited from the broader risk-on environment, though the cryptocurrency’s advance remained modest compared to some altcoins.
Broad crypto gains mask underlying weakness in Bitcoin flows
The rally was decidedly broad-based. Of the 100 constituents in the CoinDesk 100 index, 94 traded higher over 24 hours. The smaller-cap CoinDesk 80 surged 4.7%, significantly outpacing the large-cap Bitcoin-heavy CoinDesk 5, which gained just 1.2%. Ether added 1.1% to $2,444, while Solana rose 2% to $100.57.
Yet the enthusiasm hasn’t translated into sustained institutional buying. U.S. spot Bitcoin ETFs experienced outflows of $295.98 million on Wednesday alone, following a $450.33 million redemption the previous day. Since September 8, these products have shed more than $1 billion across seven trading sessions, with total net assets now at $95.19 billion. Bitcoin remains 6.9% below its September 4 monthly peak of $82,284.
Speculative traders return as Zcash soars on Paradigm backing
The real story Thursday was the return of speculative appetite. Privacy token Zcash jumped 23% to hit a record near $1,369 after Paradigm co-founder Matt Huang disclosed the investment firm now holds ZEC and described it as “a private complement to Bitcoin.” The endorsement from one of crypto’s premier venture firms sent Zcash’s market cap to $23.2 billion—now worth twice that of rival privacy coin Monero, which slipped 0.97%.
Zcash’s derivatives positioning tells the tale of speculative traders returning. Open interest surged 37.84% to $2.2 billion, while the funding rate turned deeply negative at -0.0253%, meaning short sellers were paying long holders even as the token climbed to new highs. Traders who had bet against the rally spent the month being systematically squeezed.
Other mid-caps participated. NEAR Protocol jumped 16% to $2.82, while CoinMarketCap’s “Altcoin Season” indicator ticked up to 39/100 after lingering around 32/100 earlier in the week. The shift signals that attention is rotating away from Bitcoin dominance toward smaller assets with higher leverage.
Derivatives positioning shows traders adding risk
Aggregate crypto futures open interest climbed to $64.4 billion from $59.7 billion on Monday, with traders actively adding exposure into the rally rather than covering short positions. Bitcoin open interest rose 1.41% to $26.6 billion, while Ether’s climbed 1.39% to $16.7 billion. Liquidations totaled $214.3 million over 24 hours—evidence that leveraged traders on both sides faced margin calls.
Bitcoin’s funding rate remains positive at 0.0070%, with the predicted rate at 0.0082%, though venue-to-venue spreads are wide. The aggregated long/short ratio now stands at 1.13, skewing bullish for the eighth consecutive day after three weeks in negative territory.
The Fed’s messaging provided temporary relief to risk assets, but Bitcoin’s muted response and persistent ETF outflows suggest institutional conviction remains fragile. Whether this rally extends likely depends on whether the Fed actually follows through on its dovish projections—or whether incoming economic data forces another pivot.