The current rally in cryptocurrencies such as Bitcoin (BTC) is expected to be tested in coming days by an interest rate decision from the U.S. Federal Reserve.
Financial markets are pricing in an 85% chance that the U.S. Federal Reserve will raise interest rates by 25-basis points at the conclusion of its policy meeting on Sept. 16.
Higher interest rates are typically bad for risk assets such as crypto, and Wall Street is watching closely to see if Bitcoin and other digital assets can sustain their current momentum.
After languishing for nearly a year and trading below $65,000 U.S., the world’s largest cryptocurrency has staged a big rebound since late August and risen as high as $82,000 U.S.
It’s been a big reversal for Bitcoin, which had seen its price cut in half after hitting an all-time high of $126,000 U.S. in October 2025.
Consequently, the Bitcoin options market has turned bullish for the first time in 12 months, with traders betting that BTC could hit $80,000 U.S. or higher by year’s end.
Bitcoin exchange-traded funds (ETFs) have shown signs of renewed demand in recent weeks, with inflows turning positive after eight consecutive weeks of outflows.
Analysts have said that cryptocurrencies have gotten a bounce as investors treat digital assets as a store of value similar to gold amid rising geopolitical risks and elevated bond yields.
The question now is whether the U.S. Federal Reserve will spoil the party with a rate hike.
Bitcoin was trading at $77,800 U.S. on Sept. 14.
