Fed Countdown Begins as Bitcoin Pushes Higher Beyond the $64,000 Level

Markets are expecting the Federal Reserve to leave interest rates unchanged at Wednesday’s meeting, but some investors are still preparing for a potential surprise hike. Financial firms including Citadel Securities and UBS have warned that a rate increase remains a possibility.

Trump’s Iran Remarks Drive Oil Higher

President Trump said during a Fox News interview that Iran would face a strong response after a missile attack targeted U.S. troops in Jordan the previous night.

Following his comments, oil prices extended their gains, moving from an earlier 4% jump to nearly 7%, with crude trading around $84.63.

Nasdaq 100 futures declined about 0.5% before reducing losses to around 0.2%.

Bitcoin also eased slightly but remained positive for the day, trading near $64,200.

Zuckerberg Rejects U.S. Ban on Chinese AI Firms

Meta CEO Mark Zuckerberg said blocking Chinese artificial intelligence companies from operating in the U.S. would not be an effective solution.

His comments followed the launch of Moonshot AI’s Kimi K3 model in China and allegations from U.S. officials that the company may have benefited from technology linked to American AI developers such as OpenAI and Anthropic.

Zuckerberg argued that the U.S. should focus on identifying weaknesses and improving its competitive position in AI rather than relying on broad restrictions against Chinese companies.

Oil Rallies as Iran Tensions Escalate Again

Crude prices moved higher after renewed geopolitical concerns involving Iran, following reports that U.S. forces in Jordan were targeted by missiles overnight.

The missiles were reportedly intercepted and caused no damage, but the incident pushed WTI crude oil up 4.3% to $82.68.

Despite the move in energy markets, broader financial assets showed limited reaction. U.S. stock futures pointed to modest gains, while Bitcoin climbed about 1.5% to $64,400.

The main focus for investors remained the Federal Reserve’s interest rate decision. Although markets widely expected rates to remain unchanged, traders were pricing in about a 35% chance of a 25-basis-point increase.

Altcoins Outperform Ahead of Fed Decision

Smaller cryptocurrencies led market gains ahead of the Fed announcement, with several lower-cap tokens posting strong performances.

Audiera’s BEAT token gained 28% over 24 hours, ranking as the top performer among the 100 largest cryptocurrencies by market capitalization. Uniswap’s UNI rose 7.2%, while Jupiter’s JUP advanced 7%.

The CoinDesk DeFi Select Index also gained 2.8% as traders positioned themselves ahead of the central bank’s decision.

South Korea’s Kospi Extends AI-Driven Decline

South Korea’s benchmark Kospi index dropped another 6% on Wednesday, extending a steep selloff that began after reaching a peak of 9,385 points on June 19. The index has since fallen nearly 40%.

The decline has been fueled by losses in major technology companies, including Samsung Electronics and AI semiconductor manufacturer SK Hynix. Investor appetite for AI-related stocks has weakened globally as concerns grow over stretched valuations.

Some analysts believe capital leaving overheated AI investments could eventually shift toward cryptocurrencies.

10x Research suggested that if AI-related valuations continue to reset, Bitcoin could benefit from investors seeking alternative opportunities.

ARK Invest Moves Away From Crypto Stocks Toward Space Assets

ARK Invest purchased around $12 million worth of SpaceX shares on Tuesday, adding 105,108 shares across its ETFs as the stock gained 2.6% to $116.41. The purchase followed a 29% monthly decline that pushed SpaceX shares below their $135 June IPO price.

At the same time, the firm reduced exposure to crypto-related equities, selling approximately $4 million of Robinhood shares, $2.3 million of Block shares, and $1.6 million of Bullish shares.

ARK also added smaller positions in BitMine and a Solana staking ETF, but the broader portfolio shift favored artificial intelligence and space-related investments over crypto-linked companies.

The move came after Morgan Stanley said SpaceX’s recent decline effectively values its AI business at zero while maintaining a $300 price target.

Bitcoin Volatility Stays Low Despite Policy Uncertainty

Bitcoin’s 30-day annualized implied volatility index (BVIV), a measure of expected market turbulence, remains below 40%, far below the 60%+ levels seen during major selloffs earlier this year.

Because the index reflects demand for options and hedging activity, the current reading suggests traders are not expecting significant short-term price swings.

The muted volatility comes despite uncertainty surrounding the Fed’s decision. While most investors expect a pause, some major institutions, including Citadel, are preparing for the possibility of higher borrowing costs.

The CME FedWatch tool currently shows around a 35% probability of a rate hike, an unusually elevated level of uncertainty so close to a policy announcement.

Bitcoin Stays Above $64,000 Ahead of Fed Meeting

Bitcoin traded above $64,000 during Asian trading hours on Wednesday, gaining around 1% as the broader crypto market moved higher before the Federal Reserve decision.

Ether increased 1.7% to $1,909, while XRP led major cryptocurrencies with a 2.6% gain.

CME data showed that about 70% of traders expected the Fed to keep rates within the 3.50%–3.75% range, marking the sixth consecutive meeting without a policy change.

However, roughly 30% of traders were pricing in a quarter-point increase, with Citadel Securities warning clients of a potential surprise hike and UBS also noting that such an outcome could occur.