Federal Reserve’s Hawkish Cut to Impact Crypto Markets

2 mins mins

Key Points:

A Mellon Bank analyst highlights a possible hawkish rate cut and its risks.
Potential major impact on Bitcoin and Ethereum pricing.
Market focusing on Fed leadership and economic data for 2026.

An unnamed Mellon Bank analyst suggests a ‘hawkish rate cut’ by the Federal Reserve in December, affecting rates and economic policies as the Chair transition looms.

The potential ‘hawkish rate cut’ could influence macroeconomic conditions, impacting cryptocurrency markets like Bitcoin and Ethereum through changed interest-rate and liquidity expectations.

Federal Reserve’s Rate Decisions to Reshape Crypto Outlook

A Mellon Bank analyst suggests the market is expecting a hawkish rate cut by the Federal Reserve, meaning the anticipated rate reduction may not lead to immediate easing. The changing policy depends heavily on future economic data.

Bitcoin and Ethereum pricing is directly impacted, given the Federal Reserve’s influence on risk asset valuations. The anticipated dot plot will possibly confirm divergences within the Federal Open Market Committee (FOMC). Insights into the US Dollar Index trends suggest a cautious sentiment as we approach potential Fed cuts, which could affect global market expectations.

“The Committee is strongly committed to returning inflation to our 2 percent objective,” said Jerome Powell, Chair, Federal Reserve, and will make decisions “meeting by meeting” based on incoming data.

Market reactions have focused on the implications of a potential leadership change at the Federal Reserve. Financial circles are assessing how this might affect monetary policy and economic projections for 2026.

Cryptocurrency Volatility Tied to Fed’s Hawkish Signals

Did you know? The Federal Reserve’s past hawkish signals have frequently induced volatility in major cryptocurrencies like Bitcoin, showcasing the central bank’s broader impact beyond traditional financial markets.

Data from CoinMarketCap as of December 8, 2025, highlights Bitcoin’s market position with a market cap of $1.84 trillion and dominance of 58.67%. The current price stands at $92,093.25, with a 24-hour trading volume surge of 61.83%. Recent 90-day trends show an 18.30% decline.

bitcoin-daily-chart-4845 — Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 11:02 UTC on December 8, 2025. *Source: CoinMarketCap*

Insights from Coincu research team predict that a hawkish stance could sustain current volatility levels in crypto markets. Historical trends suggest that when interest rates are perceived as less accommodating, the crypto markets face increased uncertainties and oscillatory price patterns.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.