Bitcoin Magazine

Federal Reserve Cuts Interest Rates by 25 Basis Points, Ends Quantitative Tightening

The Federal Reserve cuts its benchmark interest rate by 0.25% today to 3.75%-4% The last time the Federal Reserve cut rates was in September 2025.

The cut in September was their first rate cut of the year, following a period of rate holds.  

In general, the Fed lowers borrowing costs for consumers and businesses, aiming to stimulate spending and investment. At the same time, some feel that a rate cut signals underlying economic weakness.

Yesterday, Bitcoin was trading at $116,000 yesterday but since slumped down to under $111,000 earlier today. Bitcoin’s price slightly jumped to the high $111,000s as the news came out. It is currently trading at $111,470.

Historically, bitcoin responds to monetary‑policy shifts. For example, after the Fed’s emergency cuts in March 2020, Bitcoin plunged nearly 39 % before rebounding strongly. 

More recently, when the Fed cut rates in September 2025, Bitcoin’s reaction was muted, suggesting markets may have priced in the move.

Federal Reserve to stop Quantitative Tightening 

Chair Powell also said that the central bank is approaching the end of its Quantitative Tightening (QT) program, a move that could provide a boost to risk assets, including bitcoin. The Fed said they will stop QT by December, according to reports. 

While Powell has previously flagged that the Fed is nearing this stage, uncertainty from the ongoing government shutdown complicated the outlook. With QT concluding, markets should respond positively.

JUST IN: Federal Reserve announces it will stop shrinking it's balance sheet on December 1 pic.twitter.com/1SYilnW1cA

— Bitcoin Magazine (@BitcoinMagazine) October 29, 2025

Quantitative Tightening is the Federal Reserve’s tool for shrinking its balance sheet and reducing liquidity in financial markets. It operates in contrast to Quantitative Easing (QE), which expands the Fed’s balance sheet to stimulate economic activity. 

QT typically involves selling government bonds or allowing them to mature without reinvestment, actions that increase bond supply, push yields higher, and raise borrowing costs for consumers and businesses. 

Higher interest rates generally reduce spending and borrowing, helping control inflation and prevent the economy from overheating.

A related process, tapering, slows the pace of QE asset purchases but does not actively shrink the balance sheet. 

The Fed notably implemented QT in 2022, letting nearly $1 trillion in securities mature to curb inflation after prior QE programs had massively expanded the balance sheet. While effective at cooling inflation, QT carries risks, including market volatility and potential economic instability.

The end of QT halts the draining of liquidity from the market, which could free up capital to flow into risk-sensitive assets, like bitcoin and other crypto.

This post Federal Reserve Cuts Interest Rates by 25 Basis Points, Ends Quantitative Tightening first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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Headed lower on Wednesday ahead of the decision, bitcoin remained so in the minutes following the news at $111,700, down 3% over the past 24 hours.

Bitcoin Magazine

Bitcoin Holds Its Breath as Fed Looks to Cut Rates

Bitcoin price’s recent rally yesterday ran into resistance just above $116,000, settling under $113,000 at the time of writing, as traders weigh broader macroeconomic signals ahead of today’s Federal Reserve announcement. 

The cryptocurrency market’s total capitalization has retreated 1.4% over the past 24 hours to $3.81 trillion, according to Bitcoin Magazine Pro data, even as U.S. equities continue to reach fresh highs.

Attention, both in the bitcoin and broader markets, is squarely on the Federal Open Market Committee (FOMC) rate decision coming later today, widely expected to deliver a 25-basis-point cut to the benchmark interest rate. 

Cooler-than-expected consumer price inflation last week and a slowing labor market have fueled expectations for this reduction, with markets seeming to be pricing in nearly two more cuts by year-end. 

Lower interest rates historically boost risk appetite, including demand for bitcoin, by reducing yields on cash and bonds and increasing liquidity in financial markets.

However, the immediate impact of today’s rate cut may be muted, as it may be already priced in. 

Investors will be scrutinizing Fed Chair Jerome Powell’s press conference for guidance on the future trajectory of monetary policy. 

A key question remains whether the Fed will signal an end to its Quantitative Tightening program, a dovish move that could inject further upside momentum into risk assets. Powell has previously indicated that the Fed is nearing this stage, though uncertainty from the ongoing government shutdown could cloud the outlook. If Quantitative Tightening ends, bitcoin should react positively.

Complicating matters, the U.S. labor market exhibits signs of weakness despite low unemployment, with average job search durations remaining historically long and hiring activity subdued. 

Inflation remains above the Fed’s 2% target, partly due to lingering tariffs. 

Institutional Bitcoin demand

Institutional demand for bitcoin remains supportive. BTC ETFs have recorded consistent net inflows, with $202.4 million added on Tuesday alone, reflecting growing confidence in the asset among professional investors. 

On the technical side, bitcoin continues to hold above a rising trendline dating back to May, with immediate resistance at $114,500 and support at $112,000.

A break above the former could target $120,000, while a slip below the latter may see a pullback toward $106,500.

As the Fed’s decision approaches, bitcoin remains at the crossroads of macroeconomic policy, technical positioning, and investor sentiment. 

At the time of writing, bitcoin is trading at $111,200.

This post Bitcoin Holds Its Breath as Fed Looks to Cut Rates first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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