Federal Reserve communications have driven significant Bitcoin volatility. Last week, Chair Kevin Warsh’s hawkish Jackson Hole speech pushed BTC down to $77,000 and raised the odds of a rate hike to 57%. On Thursday, September 3, Governor Christopher Waller signaled he would support holding rates steady, sparking a 5% BTC rally. The same day saw $730.8 million in net inflows into spot Bitcoin ETFs. The CME FedWatch Tool now shows a coin-toss probability on the rate decision. Past FOMC decisions in 2026 have acted as price pivot points, with most rate-hold decisions producing bearish Bitcoin reactions.
Last week, Federal Reserve Chair Kevin Warsh delivered a hawkish speech at the Jackson Hole event, causing Bitcoin to drop to $77,000. The Fed was not yet done fighting inflation, and the news raised the odds of a rate hike to 57%.
On Thursday, the 3rd of September, Bitcoin rallied 5% in a day following comments from Fed Governor Christopher Waller. Speaking at a Reuters event, Waller indicated that he “would be inclined to support keeping interest rates unchanged during the September meeting.”
The same day saw $730.8 million net flows into spot BTC ETFs, highlighting strong demand. This Bitcoin price move led to an uptick across the crypto market.
It also slashed the odds of a rate hike from 57% to closer to 50%, according to the CME FedWatch Tool. It is now a coin toss whether interest rates remain unchanged or face a hike.
In 2026, the days around the FOMC rate decision have tended to be clear price pivot points. Decisions in January, March, and June saw a bearish reaction from Bitcoin with heightened liquidation numbers.
Even if the Fed’s September decision is to hold rates steady, it could have a bearish impact on crypto. In 2022, to fight high inflation, the Fed raised rates from 0.25% to 4.50%, sucking capital out of crypto and accelerating the BTC bear market.
A decision to increase interest rates would signal that the trend has changed. The cost of capital would be rising once again and could force Bitcoin to reprice accordingly.
Dovish signals from the Fed would increase the chances of a bullish scenario for crypto. If spot ETF flows keep up the inflow streak and BTC demand accelerates, it could bode well for a true bull market shift.
