Fed holds rate steady as recent dollar slide fuels Bitcoin, crypto debate

The US Federal Reserve just hit pause on rate cuts — but the real story is the dollar's epic slide. While the FOMC voted to hold the federal funds rate steady at 3.5%-3.75% (first pause since July), the Bloomberg Spot Dollar Index is tanking to four-year lows. Two Fed officials even dissented, pushing for another 25-basis-point cut. Inflation? Still 'somewhat elevated,' according to the Fed. But markets are already pricing in a different kind of easing.

Trump's playing 4D chess with the dollar. Despite calling for massive rate cuts, he downplayed the dollar's weakness, saying 'The value of the dollar is great.' Analysts like The Kobeissi Letter see this as 'a clear signal that President Trump is willing to tolerate a weaker Dollar to push rates lower and boost US exports.' Bloomberg TV's David Ingles put it bluntly: 'President Trump may effectively be cutting rates on the Fed's behalf by letting the dollar slide.'

What this means for crypto? Buckle up. Bitcoin and the broader market have been volatile as traders debate whether future rate cuts could revive prices after October's brutal liquidation. Historically, digital assets thrive during loose monetary policy — but the dollar's trajectory might be an even bigger catalyst than interest rates.

Julien Bittel of Global Macro Investor has called a strong dollar a 'wrecking ball' for risk assets, warning it tightens global financial conditions. Analysts at OSL point to an inverse relationship between Bitcoin and the US Dollar Index — when the dollar flexes, crypto often flinches. Dollar strength = risk-off mood.

Meanwhile, expectations for actual Fed rate cuts are fading. Markets now price the probability below 50% for the next two meetings, as the Fed watches inflation and stronger-than-expected GDP growth. The dollar's unofficial easing might be doing the heavy lifting instead.