Bitcoin whipsaws as divided Fed cuts rates and restarts bill purchases

The Federal Reserve lowered its federal-funds target range by 25 basis points to 3.5%–3.75% on December 10, 2025, while bitcoin swung sharply as traders weighed cheaper short-term money against a divided policy vote and limited projected easing in 2026.

The decision was consequential for digital-asset markets because interest rates influence the relative appeal of cash, the cost of leverage and investors’ willingness to hold volatile assets without contractual cash flows. The announcement did not mechanically determine bitcoin’s value, however, and the immediate price action did not establish a durable trend.

A cut with disagreement in both directions

The Federal Open Market Committee approved the action by a 9–3 vote. Governor Stephen Miran dissented because he preferred a larger half-percentage-point reduction. Federal Reserve Bank presidents Austan Goolsbee and Jeffrey Schmid dissented for the opposite reason, preferring no change.

That split exposed uncertainty about how policymakers should balance a cooling labor market against inflation that the Fed described as somewhat elevated. The statement said job gains had slowed during 2025 and downside risks to employment had risen in recent months. It also restored language saying officials would carefully assess incoming data, the evolving outlook and the balance of risks when considering further adjustments.

The accompanying Summary of Economic Projections supplied important context. Participants’ median projection placed the federal-funds rate at 3.6% at the end of 2025 and 3.4% at the end of 2026. Median projections put 2026 personal-consumption-expenditures inflation at 2.4% and core PCE inflation at 2.5%. These were conditional individual assessments, not promises or enacted future policy.

Bitcoin’s initial reaction reversed

Contemporaneous reporting from The Block, published at 3:08 p.m. Eastern and updated at 4:13 p.m., recorded bitcoin trading between approximately $93,200 and $91,700 during the post-announcement volatility. Ether moved within an approximately $3,340–$3,440 range, while Solana, XRP and BNB displayed similar choppy patterns.

Those figures were observed trading ranges reported during a limited event window, not official daily closes or a consolidated record of every exchange. Cryptocurrency markets trade continuously, and prices can differ across venues, indices and timestamps. The range nevertheless supports the narrow conclusion that the initial response was unstable: traders first reacted positively to the cut and then partially reversed as they processed the guidance and projections.

It would be too strong to attribute every movement to the Fed. Positioning before the announcement, leverage, exchange liquidity, fund flows and asset-specific orders could all have influenced the path. The evidence establishes temporal proximity and a plausible macro catalyst, not exclusive causation.

Bill purchases added a liquidity question

The Fed also judged reserve balances to be at ample levels and directed the New York Fed’s trading desk to buy shorter-term Treasury securities as needed to maintain that condition. The New York Fed said on December 10 that it planned to announce an initial schedule on December 11 covering approximately $40 billion of Treasury-bill purchases beginning December 12.

For crypto markets, the announcement mattered because balance-sheet operations can affect dollar funding conditions and broader liquidity expectations. But the stated purpose was reserve management: accommodating growth and seasonal changes in demand for Federal Reserve liabilities. Describing the plan as a new quantitative-easing program would therefore have exceeded the event-day record.

The defensible December 10 conclusion is narrower. The Fed delivered a quarter-point cut, but disagreement inside the committee and a cautious projected rate path complicated the signal for risk assets. Bitcoin’s rapid reversal showed that the headline reduction alone was insufficient to settle how traders interpreted the policy package.