Market uncertainty persists as divisions within the Federal Reserve and an unclear interest-rate path through 2026 weigh on bitcoin and other risk assets.
Bitcoin (BTC) fell below $90,000 after the Fed’s widely expected 25-basis-point rate cut to 3.25%, down roughly 2.4% since early Asian trading hours, according to CoinDesk data. Ether slipped 4% to $3,190, while the CoinDesk 20 Index dropped more than 4%.
Traders cited mixed messaging from the Fed, which also announced plans to purchase $40 billion in short-term Treasury bills to ease liquidity strains in money markets. Analysts stressed that this program is primarily a liquidity-management measure, not a return to broad-scale quantitative easing.
Internal Fed divisions are amplifying market caution. Two FOMC members voted against the rate cut, and six indicated that a reduction was “not appropriate.” The central bank also signaled only one additional cut in 2026, falling short of market expectations for two to three reductions.
“The Fed is divided, and the market lacks clarity on rates until May 2026, when Chairman Jerome Powell will be replaced,” said Greg Magadini, director of derivatives at Amberdata. He added that a “deleveraging” or market pullback may be needed to convince the Fed that lower rates are warranted.
Shiliang Tang, managing partner at Monarq Asset Management, said bitcoin is tracking equities. “Crypto initially spiked on the news but steadily moved lower with stock futures, with BTC testing but failing to break $94k for the third time in two weeks,” he said, noting that implied volatility continues to drift lower.
Liquidity management, not QE
Some in crypto have likened the Fed’s program to the quantitative easing of 2020–21, but analysts say the comparison is misleading. Unlike traditional QE, which targeted long-term Treasuries and mortgage-backed securities to inject liquidity and suppress yields, the current program is designed as a preemptive measure to stabilize money markets.
“This is sadly not Lambo QE. More like ‘my Uber is 7 minutes away’ QE,” said Andreas Steno Larsen, founder of Steno Research. Pseudonymous observer EndGame Macro added, “Instead of risking a 2019-style scramble, the Fed is quietly building a cushion to ensure the system has enough breathing room through the spring.”
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