According to James Butterfill, the head of research at Coinshares, the Federal Reserve ultimately trimmed the fees and essentially yawned.
Butterfill: Rate cut hype fades. Bitcoin waits for the actual pivot signal
Bitcoin (BTC) has been stomping on water for three months, but the volatility has been compressed to about 26%. According to a report by Butterfill, Futures Markets has been cheating on the idea of three cuts this year, but price action says “show me” for now.
The Fed shaved 25 basis points (BPS) to the target range of 4.0% to 4.25%, with newcomer Stephen Miran voted for half-point meat. The median dot plot points to an additional 50 bps cut in 2024, and pencils to reduce 25 bps in 2026 and 2027.
How do you split? Two more trims will be shown in 2024, two one, six see none, and one dot even gives hints at a high rate by the end of the year. Coinshares analysts explain that another outlier projected 125 bps of easing in 2025.
He also notes that the economic forecast summary has disrupted things even more. Growth in 2025, lower unemployment rates, and rough core inflation, along with greater downside employment risks.
Batafil reads it as a more diving response feature. Despite inflation that refuses to cool down completely, its attitude can hone Bitcoin’s appeal as a protection against financial decline.
However, he says the market is eager to confirm. It appears that Bitcoin is patiently spending its time, compressing volatility and waiting for the Fed to stop whispering and actually sing, until policymakers deliver a clearer, more continuous path to cut.
“We interpret this as adopting a more flashy response function and easing policy despite leaving behind inflation concerns,” writes Batafil. “For Bitcoin, this shift highlights its role as a hedge against financial decline, but muted market responses indicate that investors are still waiting for a strong confirmation that they are still embarking on a easing cycle of easing.”
CME’s FedWatch actually screams “Done Deal” and pegs 25 base point trim, better than the 90% shot. Polymarket gamblers are slightly less bullish at 86%, but Kalshi’s crowd nods at 85%.
Bitcoin is still not ud extension and there are no odds. When the next 25 bps cuts the nearby lock, the traders are basically sipping the latte and waiting for Powell to belt the chorus. Bitcoin plays a powerful, silent type until the Fed turns Whisper into a full-throat serenade.
