Bitcoin Faces Downside Risk Ahead of Fed's Sept. 16 Rate Decision

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โดย ccn.com·US·Read original
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Bitcoin would likely fall if the Federal Reserve raises interest rates on Sept. 16, but the size and durability of the decline would depend less on the quarter-point move itself than on what Chair Kevin Warsh signals about the path ahead. With markets pricing in roughly a 60% chance of a September hike, a 25-basis-point increase is only partly discounted. ChatGPT's base case rests on a sharp but manageable risk-off reaction, followed by stabilization if the Fed suggests the move is precautionary rather than the start of a sustained tightening cycle. A hawkish hike, by contrast, could trigger a deeper deleveraging across crypto. The Fed held its target range at 3.50%-3.75% on July 29, although three FOMC members dissented in favor of a quarter-point hike. Since then, the case for tightening has strengthened: August payrolls rose by 162,000, unemployment remained at 4.1%, and Warsh has stressed that inflation must move toward 2% "clearly and at sufficient speed." Inflation is still uncomfortable, with July PCE inflation at 3.7% year over year and core PCE at 3.3%, while July CPI was 3.4%. Crucially, the last major inflation readings before the meeting have not arrived yet: August PPI is due Sept. 10 and CPI Sept. 11. Governor Christopher Waller has said further disinflation could justify holding, while a disappointing inflation trend would make a hike appropriate. Higher interest rates are usually bad for Bitcoin because they lift Treasury yields, strengthen the dollar, and tighten financial conditions, making cash and bonds more competitive relative to non-yielding assets. Bitcoin is also more integrated with traditional markets, as IMF and BIS research show, and leverage can amplify selloffs. Institutional flows provide another transmission mechanism, with CoinShares reporting about $100 million left digital-asset products following Warsh's hawkish Jackson Hole message, before roughly $1 billion returned as Waller sounded more dovish. History warns against a simple "hike equals crash" rule: during the 2015-2018 tightening cycle, Bitcoin surged from roughly $430 at the end of 2015 to nearly $20,000 in December 2017 before crashing, while in 2022, as the Fed raised rates from 0.25%-0.50% in March to 4.25%-4.50% in December, Bitcoin lost about 60% that year. Wall Street and crypto analysts are converging on the Fed risk, with Barclays and UBS shifting to 25-basis-point hikes in September and December after the strong payrolls report. ChatGPT's scenarios for the Sept. 16 decision include an 80% conditional scenario of a mild 25-basis-point hike with balanced guidance, where Bitcoin could initially drop roughly 1%-5% over the first one to three trading days; a 17% scenario of a hawkish hike with projections that could produce a roughly 5%-12% Bitcoin drawdown; and a 3% tail case of a surprise 50-basis-point hike that could generate a disorderly 10%-20% crypto selloff. The probability-weighted conclusion is that a September Fed hike would be bearish for Bitcoin in the short run, but a routine quarter-point move alone is unlikely to establish a lasting bear trend. The decisive variables will be the two-year Treasury yield, real yields, the dollar, and the expected terminal policy rate, not merely the headline decision. The biggest upside risk is that markets conclude the tightening cycle is nearly finished, yields peak, and Bitcoin rebounds, while the biggest downside risk is an inflation surprise that turns one hike into the beginning of several.

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