Bitcoin Decouples From Stocks as Fed Decision Looms
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- Bitcoin has held above $63,000 and gained about 6% in July even as a basket of semiconductor stocks fell nearly 20% and the S&P 500 stayed little changed.
- CME FedWatch data shows markets pricing a 70% probability the Fed leaves rates unchanged Wednesday and a 30% chance of a 25-basis-point hike.
- Block Scholes' Thahbib Rahman called Wednesday's FOMC "one of the most uncertain in years" and attributed the whipsaw in expectations to softer inflation data competing with geopolitical tensions, higher oil prices, and tariff risks.
- K33 Research's Vetle Lunde wrote that softer correlations between bitcoin and equities mean the FOMC may have "a more limited impact on BTC than in previous periods of heightened policy uncertainty."
- Crypto sentiment has continued to improve despite macro uncertainty, and Rahman wrote that "anything remotely dovish from Warsh could lead to BTC's outperformance continuing."
Why it matters: Markets pricing a 30% chance of a surprise Fed rate hike face what one analyst called one of the most uncertain FOMC meetings in years — but bitcoin's 6% July gain against a 20% slide in semiconductor stocks shows it has decoupled from risk assets, leaving a dovish surprise from Chair Warsh with room to widen the divergence.
