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Anxiety in Crypto Space as Critical FOMC Decision Looms 

A picture of the Fed building in the U.S.

Anxiety in Crypto Space as Critical FOMC Decision Looms 

In Brief

  • • Crypto markets are on edge ahead of the release of FOMC meeting minutes.
  • • Past FOMC announcements have triggered heightened volatility.
  • • While the minutes could impact market direction, there is also precedent for muted reactions.

The Federal Open Market Committee (FOMC) met on 10 December, but as is the custom, the minutes of the meeting are released roughly three weeks after, which is today. Such release of the minutes can affect a number of things including the crypto market.

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A crypto trader shared a reminder on the upcoming release, which now raises questions about what to expect. These questions tend to increase anxiety around the announcement, as investors and traders eagerly wait to see how the market will react.

Volatility May Hit Hard After FOMC Minute Release

The release of FOMC minutes has historically had some effects on the crypto market, one of which is increased volatility. While the cryptocurrencies are already known for their volatile nature, this announcement has in the past increased the volatility to a greater proportion than usual, creating anxiety.

Volatility, which is a wild change in the price of an asset can go in both the positive or negative direction depending on the content of the minutes. Expected discussions include rate cuts, liquidity, and cash injections, all of which can significantly alter the state of the market. 

If the Fed announces more rate cuts for example, investors are emboldened to take on risk assets like crypto. On the contrary, if no rate cuts are in view, investors become more wary and will tend to protect their investments and profits they have made from other assets such as gold and silver.

As the year rounds up, analysts say 2026 may hold a better fate for crypto than 2025. A major determining factor on this will be the outcome of the minutes released by the Fed a little later today.

FOMC Announcements May Make no Difference

There is usually a heightened risk of volatility when FOMC meetings or decisions are made. However, this is not always the case, because some outcomes in the past have made no difference in the market. 

The FOMC meeting in September for example proved to have no effect on the price of Bitcoin even though the Fed cut rates by 25bp. A similar pattern may repeat this time, unless the market is primed for a shift from the current downtrend.

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