#Federal Reserve interest rate unchanged but internal divisions intensify

The Federal Reserve (Fed) maintained the benchmark interest rate in the 3.5% to 3.75% range in its decision at the end of April 2026. However, this voting result showed a rare 8 to 4 split, marking the most intense internal disagreement since 1992, exerting a clear downward pressure on the cryptocurrency market.
Below are the three main ways the Fed's internal divisions impact the crypto space:
1. Liquidity tightening and rising risk premiums, prolonged high interest rates (Higher for Longer): Due to the Middle East conflict boosting energy costs and reigniting inflation concerns, markets expect almost no rate cuts remaining in 2026. Capital withdraws from risk assets: The high interest rate environment increases the opportunity cost of holding cryptocurrencies, leading funds to flow back into high-yield traditional safe-haven assets (such as U.S. Treasuries), causing a "mass exodus" in the crypto market.
2. Fragile market sentiment triggers a wave of liquidations and short-term volatility: After the decision was announced, Bitcoin (BTC) quickly fell below the $75,000 mark, even briefly dropping to $74,900. Leverage liquidation pressure: Data shows that the hawkish stance in the policy statement triggered about 120k liquidations, with a total liquidation amount of up to $550 million, indicating that increased divisions make the market extremely sensitive to uncertainty.
3. Policy uncertainty and disagreements over leadership succession: Chair Powell's term will end on May 15, and the Trump-nominated successor, Kevin Warsh, leans toward aggressive rate cuts.
Pessimism prevails: The tug-of-war between current officials and future policy directions leaves crypto investors lacking clear guidance for the monetary path in the second half of the year, and the crypto market may short-term shift from "policy-driven" to "data-driven" consolidation. $BTC $DOGE $ETH