Interest Rates Unchanged in the United States, Bitcoin $84k

• The Federal Reserve kept interest rates unchanged at 4.25%-4.5%, aligning with market expectations.
• Bitcoin continued its bullish trend, trading above $84,000 and hitting $85,760 driven by positive market sentiment.
• The Fed’s projection of two rate cuts in 2025 adds a dovish tone, potentially benefiting risk assets like Bitcoin.
• An unexpected detail: President Trump’s announcement of a U.S. strategic crypto reserve, including Bitcoin, earlier in March, contributed to its rally, marking a significant governmental endorsement.

As of March 20, 2025, the financial landscape is shaped by the Federal Reserve’s latest monetary policy decision and the ongoing rally in cryptocurrencies, particularly Bitcoin.

The Fed’s decision to leave interest rates unchanged at 4.25%-4.5% was announced, aligning with market expectations and reflecting a balance between economic growth and inflation control. Concurrently, Bitcoin has maintained a bullish stance, trading above $84,000 and reaching $85,760 by March 20.

Fed’s Interest Rate Decision

The Federal Open Market Committee (FOMC) met on March 18-19, 2025, and decided to maintain the target range for the federal funds rate at 4.25%-4.5%. This decision was unanimous, with the exception of Christopher J. Waller, who preferred no change in the pace of securities holdings reduction. The FOMC’s statement, available at Federal Reserve Statement, highlighted several key points:

• Economic activity has expanded at a solid pace, with the unemployment rate stabilizing at a low level and labor market conditions remaining solid.
• Inflation remains somewhat elevated, above the Fed’s 2% long-term target, but shows signs of moderating.
• Uncertainty around the economic outlook has increased, prompting the Committee to be attentive to risks to its dual mandate of maximum employment and price stability.

A significant dovish signal was the Fed’s projection of two rate cuts in 2025, each by 0.25 percentage points, totaling a 0.5 percentage point reduction. This was accompanied by a decision to slow quantitative tightening (QT) starting in April, reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion, while keeping the cap on agency debt and mortgage-backed securities at $35 billion. This move aims to ensure sufficient liquidity in the Treasury market, potentially supporting risk assets.

Fed Chair Jerome Powell, in his post-meeting press conference, emphasized a data-dependent approach: “We are prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede us from attaining our goals,” he stated. This cautious tone was echoed in economic projections released alongside the statement, showing a median GDP growth forecast of 1.7% for 2025, down 0.4 percentage points from December, and core inflation expected at 2.8% for 2025, up 0.3 percentage points.

Stocks, Bonds, and Bitcoin

The market response to the Fed’s decision was generally positive. On March 19, the Dow Jones Industrial Average rose by over 400 points, while the S&P 500 and Nasdaq also saw gains, reflecting investor confidence in the Fed’s balanced approach and future rate cuts. Treasury yields remained stable, with the 10-year yield around 3.5%, as detailed in TD Economics Analysis.

The relationship between interest rates and Bitcoin is complex but generally inverse. When rates are low, investors allocate capital to higher-risk assets like Bitcoin, viewing it as a hedge against inflation and currency devaluation.

The Fed’s current stance—holding rates steady but signaling cuts—creates a supportive environment, but volatility remains. Historical data, as discussed in Forbes Analysis, shows Bitcoin thrives in low-rate environments, with prices often rising during rate cut cycles.

In the cryptocurrency space, Bitcoin’s reaction was notably bullish. After trading above $84,000 in the days leading up to the decision, Bitcoin reached $85,760 by March 20, a 3.4% increase from $82,718 on March 18, based on X posts from users like

An additional factor boosting Bitcoin was President Donald Trump’s announcement earlier in March of a U.S. strategic cryptocurrency reserve, including Bitcoin, Ether, XRP, Solana, and Cardano. This move, detailed in Bitcoin Price Prediction March 2025, sparked an 11% price surge to $94,164 on March 16, though prices have since moderated. The reserve aims to diversify U.S. assets and hedge against inflation, marking a significant governmental endorsement of cryptocurrencies