'Anything remotely dovish' from Fed could be good for bitcoin, says analyst
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- Bitcoin held above $63,000 in July and gained roughly 6% for the month, while a basket of semiconductor stocks fell nearly 20% and the S&P 500 was little changed, according to Block Scholes.
- CME FedWatch data shows markets pricing a 70% probability the Fed leaves rates unchanged Wednesday and a 30% chance of a surprise 25-basis-point hike.
- Block Scholes' Thahbib Rahman called Wednesday's meeting one of the most uncertain Fed meetings since 2015, noting only two meetings in that span saw markets more divided over the outcome.
- K33 Research's Vetle Lunde argued bitcoin's correlation with equities has softened, writing that this week's FOMC "may have a more limited impact on BTC than in previous periods of heightened policy uncertainty."
- Chair Kevin Warsh has cut back on forward guidance in his second meeting at the Fed's helm, leaving investors with less clarity on the central bank's next move, per Block Scholes.
- Rahman wrote that "anything remotely dovish from Warsh could lead to BTC's outperformance continuing," even as inflation data, oil prices and tariff risks have whipsawed expectations over the past month.
Why it matters: A 30% priced-in chance of a surprise hike is an unusually large tail risk for the Fed to carry into a decision, and bitcoin's weakening tie to equities positions it as a potential relative winner if AI stocks — already down nearly 20% this month — sell off further on a hawkish surprise from Warsh.
