Bitcoin fell 1.1% to $64,215 on Thursday as cryptocurrency markets absorbed the fallout from the Federal Reserve's latest policy projections, which signaled a more hawkish path for interest rates than many traders had anticipated heading into the week. The Fed held its benchmark rate steady at 3.50% to 3.75% during Chairman Kevin Warsh's first meeting, but the accompanying Summary of Economic Projections raised the median year-end 2026 rate forecast to 3.8%, with roughly half of voting members now penciling in at least one additional hike before year-end.
The shift triggered a swift reaction across digital-asset markets. U.S. spot bitcoin ETFs recorded $82.2 million in net outflows, reversing several sessions of inflows that had accompanied the broader risk-on mood tied to easing Middle East tensions. Shares of Strategy, the business-intelligence company turned corporate bitcoin treasury vehicle and the largest single corporate holder of the cryptocurrency, fell 5.2% in premarket trading as investors marked down the value of its balance-sheet bitcoin position alongside the spot price decline.
Other major tokens softened in sympathy. Ether and XRP both pulled back as traders reassessed the liquidity assumptions that have underpinned much of this year's crypto rally, which has been closely tied to expectations of easier monetary policy and ample dollar liquidity. A hawkish Fed typically reduces the appeal of non-yielding assets like bitcoin relative to short-term Treasuries, and the dot-plot shift gives policymakers more room to argue for restraint even as some officials within the committee continue to flag elevated inflation readings tied to energy-price volatility from the now-easing Iran conflict.
The Fed's updated projections arrived alongside a notably shorter policy statement than markets had grown accustomed to under former Chair Jerome Powell, a stylistic shift that some analysts interpreted as an early signal of Warsh's preference for terser, less hedged communication. Warsh has also floated plans for a broader operational review of how the Fed conducts its meetings and projections process, adding a layer of uncertainty about how future Summary of Economic Projections releases might be structured or interpreted by markets.
Crypto-focused strategists note that bitcoin's muted reaction relative to the scale of the rate-projection surprise may reflect the asset's increasing institutionalization. With a larger share of bitcoin now held through regulated ETF wrappers and corporate treasuries rather than retail wallets, price discovery has become more closely linked to traditional macro variables like rate expectations and less driven by purely speculative retail flows. That dynamic cuts both ways: it has broadened bitcoin's investor base, but it has also tied the asset's near-term performance more tightly to the same monetary-policy signals that move equities and bonds.
Options market positioning suggests traders are bracing for continued volatility. Implied volatility on bitcoin options ticked higher following the Fed announcement, consistent with a market that views the next several weeks, as Warsh settles into the role and additional economic data arrives, as a period in which the rate path remains genuinely uncertain rather than a foregone conclusion in either direction.