#BTC What Impact Will the Fed's Interest Rate Cut Have on ETH and Bitcoin Prices?

As of September 16, 2025, the Federal Reserve (Fed) has not yet announced its interest rate decision for September. The Fed will hold a monetary policy meeting from September 16 to 17 (local time), and will release the interest rate resolution and policy statement in the early morning of September 18 (Beijing time).

The market generally expects the Fed to announce an interest rate cut at that time, with a 25-basis-point cut being the mainstream expectation. According to the CME FedWatch Tool, the probability of the Fed cutting interest rates by 25 basis points at this meeting is 96.4%, while the probability of a 50-basis-point cut is only 3.6%. What impact will the Fed's interest rate cut have on the price of ETH? The Fed's interest rate cut may have different impacts on the prices of ETH and Bitcoin, and the specific analysis is as follows:

- Impact on ETH Price: The Fed's interest rate cut may benefit the price of ETH. On the one hand, an interest rate cut will improve the liquidity environment, and funds will be reallocated to high-growth and high-volatility assets. As a core asset of the new financial infrastructure, ETH has a natural advantage in absorbing liquidity. For example, on August 22, 2025, Federal Reserve Chair Jerome Powell released a dovish signal at the Jackson Hole Economic Symposium, implying a high probability of an interest rate cut in September. On that day, ETH surged by more than 14% and exceeded the all-time high of 4,887 US dollars. On the other hand, if the Fed officially cuts interest rates in September, ETH is expected to maintain its strong performance, further promote the spread of Altseason, and drive up the risk appetite of the entire market.
- Impact on Bitcoin Price: From a historical perspective, the performance of Bitcoin's price around the Fed's interest rate cuts is not fixed. When the Fed cut interest rates in 2019, Bitcoin rose sharply before the monetary policy meeting, but was sold off after the meeting as the reality of weak economic growth emerged, and the positive factors were digested in advance. In March 2020, the Fed cut interest rates urgently to respond to the COVID-19 pandemic; Bitcoin plummeted along with stocks at first, but then rebounded strongly supported by massive fiscal and monetary policies. After the interest rate cut in 2024, Bitcoin continued its upward trend, driven by factors such as cryptocurrencies becoming an election issue, record capital inflows into spot ETFs, and strong purchasing demand from companies like MicroStrategy. Regarding the September 2025 interest rate cut, if Bitcoin's price rises sharply before the monetary policy meeting, a "sell-the-news" correction may occur; however, if the price remains stable or declines slightly before the meeting, the interest rate cut may be more effective in stabilizing the market and even driving the price up.