Fed Shock Sends Bitcoin and Ether Lower Even as Iran Deal Lifts Risk Appetite in Equities

Crypto markets fell broadly on Thursday, ignoring the tailwind from a newly signed Iran peace agreement that boosted equities, after the Federal Reserve kept interest rates unchanged but struck a more hawkish tone, emphasizing inflation risks over growth concerns.

Bitcoin traded near $63,900, down roughly 3% over 24 hours while still up about 2% on the week, according to CoinDesk data. The selloff was broad-based across major tokens: Ether fell 3.4% to $1,733, XRP declined 3.9% to $1.17, and Solana slipped 3.6% to $71. Hyperliquid’s HYPE, which had led gains earlier in the week, posted the sharpest drop at 7.2% to $69, though it remains up roughly 28% over seven days. Tron was the only major token in the green, rising 0.9%.

The Federal Reserve was the main driver. Policymakers held rates steady at 3.5%–3.75% as expected, but updated projections pointed to stickier inflation and a slower trajectory for rate cuts, with some officials even leaving the door open to further hikes.

It marked the first policy decision under new Fed Chair Kevin Warsh, who pointed to extensive internal debate and reaffirmed the central bank’s commitment to price stability. The overall message was interpreted as hawkish, reinforcing expectations of tighter financial conditions that typically weigh on liquidity-sensitive assets like crypto.

Equities moved in the opposite direction, supported by geopolitical developments. President Donald Trump signed a preliminary peace agreement with Iran aimed at ending hostilities and reopening the Strait of Hormuz, lifting sentiment across traditional markets.

S&P 500 futures gained as much as 0.9%, while Nasdaq futures rose up to 1.5%. Brent crude eased toward $78 per barrel. Crypto, however, failed to follow the equity rebound, underscoring its current sensitivity to monetary policy rather than geopolitical relief.

Analysts expect Bitcoin to remain range-bound without a fresh catalyst. “We expect bitcoin to continue to trade in the $60,000 to $70,000 range in the coming weeks absent any major catalyst,” said Hashdex’s Gerry O’Shea, pointing to potential triggers such as the CLARITY Act becoming law or further US-Iran de-escalation.

He added that sentiment remains subdued as capital continues rotating into IPOs and AI equities, though institutional participation and regulatory clarity could eventually bring flows back into crypto.

Overall, price action still reflects consolidation rather than capitulation. Bitcoin holding near the low $64,000 area suggests selling pressure is stabilizing, but upside remains limited as tighter Fed policy continues to cap liquidity.