# Fed Rate Cut Boosts Bitcoin above $118,000 ∞ Markets

**Published:** 2025-09-18
**Categories:** Markets

---

![A white, textured, abstract form, resembling a soft, undulating mass, partially peels back to expose a vibrant core of concentric blue layers. A sleek metallic ring floats above the structure, which is set against a reflective, cool-toned backdrop](https://incrypthos.com/wp-content/uploads/2025/09/layered-protocol-architecture-revealing-decentralized-network-infrastructure.jpeg)

![The image presents a detailed view of a sophisticated, futuristic mechanism, featuring transparent blue conduits and glowing internal elements alongside polished silver-grey metallic structures. The composition highlights intricate connections and internal processes, suggesting a high-tech operational core](https://incrypthos.com/wp-content/uploads/2025/09/blockchain-node-interoperability-visualizing-data-stream-validation.jpeg)

## Briefing

The US Federal Reserve initiated a new easing cycle by cutting interest rates by 25 basis points, a move that immediately impacted the crypto market. This decision injected optimism, signaling renewed liquidity and pushing Bitcoin’s price above the $118,000 mark. The rate cut, announced on Wednesday night, serves as the most important data point, demonstrating how [traditional monetary policy](https://incrypthos.com/adoption/jpmorgan-embraces-stablecoins-for-traditional-finance-integration/) directly influences digital asset valuations.

![The image showcases a high-tech, metallic and blue-bladed mechanical component, heavily encrusted with frost and snow around its central hub and blades. A polished metal rod extends from the center, highlighting the precision engineering of this specialized hardware](https://incrypthos.com/wp-content/uploads/2025/09/cryogenic-cooling-unit-optimizing-asic-mining-hash-rate-efficiency.jpeg)

## Context

Before this announcement, many in the market were closely watching for signs of easing monetary policy, wondering if the [Federal Reserve](https://incrypthos.com/markets/federal-reserve-policy-anticipation-drives-crypto-market-consolidation-amid-etf-inflows/) would provide the liquidity boost needed to propel risk assets higher. There was a prevailing question about whether the crypto market, particularly Bitcoin, would respond positively to a rate cut, or if other macroeconomic concerns would temper any bullish reaction.

![The image showcases a detailed view of a translucent, frosted white and vibrant blue mechanical component, highlighting its intricate internal structure and smooth exterior. The focus is on the interplay of light and shadow across its precise, engineered surfaces, with a prominent blue ring providing a striking color contrast](https://incrypthos.com/wp-content/uploads/2025/09/advanced-protocol-architecture-for-decentralized-finance-interoperability.jpeg)

## Analysis

This market movement happened because a reduction in [interest rates](https://incrypthos.com/markets/bitcoin-dips-as-federal-reserve-cuts-interest-rates/) typically makes borrowing cheaper and increases the overall money supply. Think of it like a gardener watering plants ∞ more water (liquidity) makes the plants (assets) grow. When traditional investments offer lower returns due to rate cuts, investors often seek higher-growth opportunities, including digital assets like Bitcoin. The market reacted by buying into Bitcoin, driving its price up as investors anticipated increased capital flowing into the crypto ecosystem.

![A close-up view reveals a sophisticated, translucent blue electronic device with a central, raised metallic button. Luminous blue patterns resembling flowing energy or data are visible beneath the transparent surface, extending across the device's length](https://incrypthos.com/wp-content/uploads/2025/09/secure-hardware-wallet-biometric-authentication-for-digital-asset-management.jpeg)

## Parameters

- **Federal Reserve [Rate Cut](https://incrypthos.com/news/rate-cut/)** ∞ The US Federal Reserve reduced interest rates by 25 basis points (0.25%), marking the start of a new easing cycle.

- **[Bitcoin](https://incrypthos.com/news/bitcoin/) Price Movement** ∞ Bitcoin’s price rose above $118,000 following the rate cut announcement.

![The image displays a close-up of a high-tech electronic connector, featuring a brushed metallic silver body with prominent blue internal components and multiple black cables. Visible within the blue sections are intricate circuit board elements, including rows of small black rectangular chips and gold-colored contacts](https://incrypthos.com/wp-content/uploads/2025/09/blockchain-secure-module-enhancing-decentralized-network-data-transmission.jpeg)

## Outlook

For the next few days and weeks, market participants should watch if Bitcoin can sustain its position above the $118,000 level and potentially test the $120,[000 mark](https://incrypthos.com/news/000-mark/). A sustained hold above these levels would indicate continued bullish momentum. Conversely, a failure to maintain these gains could signal that the initial optimism is fading, leading to a re-evaluation of the market’s short-term direction.

**The Federal Reserve’s rate cut provided a clear, immediate boost to Bitcoin, highlighting the strong connection between traditional monetary policy and crypto market performance.**

Signal Acquired from ∞ <a href="https://www.livemint.com/market/cryptocurrency?utm_source=incrypthos.com&utm_medium=referral&utm_campaign=noo-engine.com" target="_blank" rel="nofollow">livemint.com</a>

## Glossary

<a href="https://incrypthos.com/adoption/jpmorgan-embraces-stablecoins-for-traditional-finance-integration/" class="glossary-item-box">

## traditional monetary policy 

This strategic pivot by JPMorgan integrates stablecoins to streamline cross-border payments and asset tokenization, enhancing operational efficiency across global financial workflows. </a><a href="https://incrypthos.com/markets/federal-reserve-policy-anticipation-drives-crypto-market-consolidation-amid-etf-inflows/" class="glossary-item-box">

## federal reserve 

Macroeconomic policy uncertainty coupled with sustained institutional capital inflows creates a systemic equilibrium, optimizing strategic positioning within digital asset portfolios. </a><a href="https://incrypthos.com/markets/bitcoin-dips-as-federal-reserve-cuts-interest-rates/" class="glossary-item-box">

## interest rates 

The Federal Reserve's recent interest rate cut led to Bitcoin struggling to maintain a key price level, signaling market caution. </a><a href="https://incrypthos.com/news/rate-cut/" class="glossary-item-box">

## rate cut 

Definition ∞ A rate cut is a reduction in a central bank's benchmark interest rate. </a><a href="https://incrypthos.com/news/bitcoin/" class="glossary-item-box">

## bitcoin 

Definition ∞ Bitcoin is the first and most prominent decentralized digital currency, operating on a peer-to-peer network without central oversight. </a><a href="https://incrypthos.com/news/000-mark/" class="glossary-item-box">

## 000 mark 

Definition ∞ A '000 Mark' refers to a specific, often preliminary, designation or marker used within certain digital asset tracking or analytical systems. </a>

**Tags:** [Central Bank](https://incrypthos.com/news/central-bank/), [Liquidity](https://incrypthos.com/news/liquidity/), [000 Mark](https://incrypthos.com/news/000-mark/), [Cut](https://incrypthos.com/news/cut/), [Market](https://incrypthos.com/news/market/), [Macro Factors](https://incrypthos.com/news/macro-factors/)	

## Discover More

- 
### [Visa Expands Global Stablecoin Settlement across Multiple Blockchains](https://incrypthos.com/adoption/visa-expands-global-stablecoin-settlement-across-multiple-blockchains/)
![A sophisticated DeFi protocol engine showcases intricate node infrastructure for digital asset management. Transparent DLT components encapsulate a vibrant blue liquidity pool, suggesting dynamic yield farming. A prominent algorithmic stablecoin, resembling a full moon, is central, surrounded by cold storage vapor, indicating secure custody. Metallic mining rig elements and a quantum-resistant processing unit highlight advanced Proof-of-Work capabilities and optimized hash rate.](https://incrypthos.com/wp-content/uploads/2025/09/advanced-defi-protocol-engine-algorithmic-stablecoin-liquidity-management.jpeg)

This strategic expansion of stablecoin settlement capabilities optimizes cross-border payment rails, enhancing liquidity management and reducing operational friction for enterprise partners.

- 
### [Nemo Protocol Developer Deployed Unaudited Code, Enabling $2.6m Exploit](https://incrypthos.com/security/nemo-protocol-developer-deployed-unaudited-code-enabling-2-6m-exploit/)
![Advanced semiconductor architecture is depicted, showing dark printed circuit board traces and numerous surface-mounted components. Prominent metallic heatsinks, with reflective blue and white geometric designs, dominate the foreground, signifying robust thermal management critical for high-performance computing. This hardware backbone is essential for blockchain node operations, facilitating cryptographic hashing and transaction validation. Such advanced chip architecture underpins Proof-of-Work mining rigs or Proof-of-Stake validator hardware, ensuring network security and data integrity within a decentralized ledger technology ecosystem. It represents the physical layer for smart contract execution and digital asset processing.](https://incrypthos.com/wp-content/uploads/2025/09/precision-engineered-hardware-driving-cryptographic-operations-for-blockchain-dlt.jpeg)

An unaudited code deployment enabled a flash loan and state manipulation attack, compromising Nemo Protocol and jeopardizing user assets.

- 
### [Crypto Markets Pause Ahead of Fed Rate Decision](https://incrypthos.com/markets/crypto-markets-pause-ahead-of-fed-rate-decision/)
![A prominent black Bitcoin symbol is centrally embedded within a complex, futuristic digital asset infrastructure. Intricate blue circuit board traces and metallic components form a dense network, suggesting a sophisticated blockchain architecture. This visualization evokes the underlying hardware and software mechanisms of a decentralized ledger technology. The composition highlights the computational power required for cryptographic proof-of-work, essential for transaction validation and maintaining network consensus. This intricate design represents a high-performance mining rig or a critical node within the peer-to-peer network, embodying the core principles of digital currency and its secure, distributed nature.](https://incrypthos.com/wp-content/uploads/2025/09/bitcoin-decentralized-ledger-hardware-cryptographic-proof-of-work.jpeg)

Investors show caution as Bitcoin holds steady, awaiting the Federal Reserve's upcoming interest rate announcement.

- 
### [Crypto Market Dips Awaiting Federal Reserve Rate Decision](https://incrypthos.com/markets/crypto-market-dips-awaiting-federal-reserve-rate-decision/)
![A multifaceted blue crystalline object, representing a high-value digital asset or fungible token, is securely cradled within a brushed metallic hardware module. This precision-engineered component suggests a cryptographic module or a validator node within a distributed ledger technology framework. Its integration implies secure custody, transaction validation, or a core element for a proof-of-stake consensus mechanism, emphasizing immutability and network security in a decentralized finance ecosystem. This setup is crucial for maintaining blockchain integrity and processing on-chain transactions.](https://incrypthos.com/wp-content/uploads/2025/09/tokenized-asset-crystalline-core-within-blockchain-validator-hardware.jpeg)

Investors show caution as crypto markets dip slightly, awaiting the Federal Reserve's pivotal rate decision this week.

- 
### [Crypto Market Dips as Liquidations Spike and Fed Decision Looms](https://incrypthos.com/markets/crypto-market-dips-as-liquidations-spike-and-fed-decision-looms/)
![A sleek, white, modular, futuristic device, partially submerged in calm, dark blue water. Its illuminated interior, revealing intricate blue glowing gears and digital components, actively expels a vigorous stream of water, creating significant surface ripples. This visual metaphor represents a DeFi protocol's liquidity generation via on-chain computation. It illustrates smart contract execution driving tokenomics and yield generation. The device signifies a decentralized autonomous organization DAO blockchain infrastructure component, perhaps a validator node, managing asset flow and algorithmic stablecoin mechanism output.](https://incrypthos.com/wp-content/uploads/2025/09/defi-protocol-liquidity-emission-from-on-chain-computation.jpeg)

The crypto market saw a broad decline driven by significant liquidations and investor profit-taking, with upcoming Federal Reserve policy adding to uncertainty.

- 
### [SEC Approves XRP, Dogecoin ETFs; New Altcoin Investment Avenues Emerge](https://incrypthos.com/markets/sec-approves-xrp-dogecoin-etfs-new-altcoin-investment-avenues-emerge/)
![A striking composition features prominent blue digital assets, resembling frosted NFTs or utility tokens, anchored on a dark blue blockchain infrastructure. A smooth white stablecoin sphere rests centrally, symbolizing fiat-pegged assets or governance tokens. The textured foundation emerges from tranquil, reflective liquidity pools, hinting at decentralized finance DeFi protocols and tokenomics. Smaller crystalline structures suggest mining rewards or staking yields, emphasizing digital scarcity and cold storage principles within a burgeoning Web3 ecosystem.](https://incrypthos.com/wp-content/uploads/2025/09/decentralized-assets-and-stablecoin-emerge-from-protocol-liquidity.jpeg)

Regulatory clearance for XRP and Dogecoin ETFs establishes new systemic pathways for institutional capital allocation and expands market product architecture.

- 
### [Allied Gaming & Entertainment Adopts Bitcoin and Ethereum for Treasury](https://incrypthos.com/adoption/allied-gaming-entertainment-adopts-bitcoin-and-ethereum-for-treasury/)
![A metallic, spherical Ethereum node, prominently featuring the ETH logo on its illuminated facets, rests amidst intricate circuit board architecture. This visual metaphor encapsulates the robust underlying blockchain infrastructure supporting decentralized finance DeFi and Web3 applications. The blue and silver palette highlights the technological sophistication of the distributed ledger, emphasizing cryptographic security and the ongoing transition to proof-of-stake for enhanced transaction validation and network scalability. This represents a core component of the Ethereum ecosystem.](https://incrypthos.com/wp-content/uploads/2025/09/ethereum-protocol-core-decentralized-ledger-technology-node-infrastructure.jpeg)

AGAE integrates digital assets into its treasury strategy, enhancing financial flexibility and future-proofing its entertainment ecosystem with blockchain-based capabilities.

- 
### [JPMorgan Launches JPMD for Institutional Digital Cash Settlement](https://incrypthos.com/adoption/jpmorgan-launches-jpmd-for-institutional-digital-cash-settlement/)
![Close-up reveals interconnected white and blue modular components, symbolizing a robust distributed ledger technology architecture. These units suggest sharding implementation, where individual modules represent network nodes facilitating parallel transaction processing. The metallic interfaces highlight secure cross-chain interoperability, essential for scalable Web3 infrastructure. This physical representation evokes efficient data flow and cryptographic security within a decentralized ecosystem, crucial for high-throughput blockchain operations.](https://incrypthos.com/wp-content/uploads/2025/09/cryptographic-sharding-modules-enabling-secure-cross-chain-interoperability.jpeg)

JPMD digitizes commercial bank deposits on-chain, enabling instant settlement and enhancing collateral mobility for institutional clients.

- 
### [Wormhole Token Jumps Following Major Tokenomics Overhaul](https://incrypthos.com/markets/wormhole-token-jumps-following-major-tokenomics-overhaul/)
![A futuristic metallic device, resembling a satellite or validator node, partially submerges in a vast body of water. From its underside, a powerful stream of vibrant blue liquid, mixed with white foam, erupts, creating ripples across the surface. This visual metaphor represents a decentralized finance DeFi protocol injecting significant liquidity into a blockchain ecosystem. The blue flow symbolizes high transaction throughput and data stream, potentially from a smart contract execution or a sustainable PoS mechanism, driving network effect and capital efficiency within a liquidity pool.](https://incrypthos.com/wp-content/uploads/2025/09/sustainable-blockchain-node-ejecting-protocol-liquidity-into-defi.jpeg)

Wormhole's W token saw a significant price increase after introducing new tokenomics, including a reserve and staking yield.

**Tags:** [000 Mark](https://incrypthos.com/news/000-mark/), [Assets](https://incrypthos.com/news/assets/), [Bitcoin](https://incrypthos.com/news/bitcoin/), [Central Bank](https://incrypthos.com/news/central-bank/), [Crypto Economy](https://incrypthos.com/news/crypto-economy/), [Cut](https://incrypthos.com/news/cut/), [Digital Asset](https://incrypthos.com/news/digital-asset/), [Federal](https://incrypthos.com/news/federal/), [Interest Rate](https://incrypthos.com/news/interest-rate/), [Investor Sentiment](https://incrypthos.com/news/investor-sentiment/), [Liquidity](https://incrypthos.com/news/liquidity/), [Liquidity Inflow](https://incrypthos.com/news/liquidity-inflow/), [Macro Factors](https://incrypthos.com/news/macro-factors/), [Market](https://incrypthos.com/news/market/), [Market Reaction](https://incrypthos.com/news/market-reaction/), [Monetary Policy](https://incrypthos.com/news/monetary-policy/), [Policy](https://incrypthos.com/news/policy/), [Price](https://incrypthos.com/news/price/), [Price Action](https://incrypthos.com/news/price-action/), [Rate](https://incrypthos.com/news/rate/), [Rate Cut](https://incrypthos.com/news/rate-cut/), [Reserve](https://incrypthos.com/news/reserve/)

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**Original URL:** https://incrypthos.com/markets/fed-rate-cut-boosts-bitcoin-above-118000/
