Bitcoin experienced significant volatility on September 17 following the Federal Reserve’s announcement of a 25 basis-point interest rate cut, bringing the target range for the federal funds rate to 4% to 4.25%. This decision also lowered the interest rate paid on reserve balances to 4.15% and reduced the primary credit rate to 4.25%, effective immediately.
In response to the rate cut, the New York Fed’s Open Market Desk will be conducting open market operations to maintain the new range, including up to $500 billion in overnight repurchase agreements and a $160 billion per-counterparty daily limit on reverse repos.
Bitcoin’s price initially surged to an intraday high of $116,318 prior to the announcement but quickly reversed course to $114,820 as traders “sold the news.” However, the decline was short-lived as Bitcoin recovered to $115,639 by press time. This rapid price movement underscores the digital asset’s sensitivity to changes in dollar liquidity and Federal Reserve policy.
While the rate cut was widely expected, it marked the Fed’s first policy adjustment in months after maintaining elevated borrowing costs. Market participants had priced in the decision, but the swift reaction from Bitcoin traders highlighted how they are positioning themselves in response to monetary policy changes.
Investors are now eagerly awaiting Chair Jerome Powell’s press conference for further insights into whether the central bank may implement additional cuts before the year ends. The stock market also experienced volatility post-announcement, with Treasury yields decreasing as bond markets adjusted to looser financial conditions. Bitcoin’s exaggerated price movements mirrored broader market sentiment but with sharper intraday swings.
As of 7:38 pm UTC on September 17, 2025, Bitcoin remains the top-ranked cryptocurrency by market cap, with its price down 0.8% over the past 24 hours. Bitcoin boasts a market capitalization of $2.3 trillion and a 24-hour trading volume of $52.5 billion. The total crypto market is valued at $4.01 trillion, with a 24-hour volume of $157.69 billion, and Bitcoin dominance currently stands at 57.33%.
Overall, the Federal Reserve’s interest rate cut sparked significant volatility in the cryptocurrency market, highlighting the sector’s sensitivity to changes in monetary policy and dollar liquidity. Traders and investors will continue to closely monitor developments and adjust their strategies accordingly in response to further guidance from the central bank.