Markets remain divided over whether the Federal Reserve will raise rates or hold steady on Wednesday, but analysts say bitcoin may be less vulnerable than AI-driven tech stocks.
Bitcoin recovered from its intra-day losses to trade flat just below $64,000 on Tuesday, as AI-linked technology stocks faltered once more ahead of one of the most uncertain Federal Reserve meetings in years.
Derivatives data from CME FedWatch currently indicates a 70% probability of the Fed keeping rates unchanged on Wednesday, alongside a 30% chance of an unexpected 25 basis-point hike. This polarization reflects Chair Kevin Warsh’s reduced reliance on forward guidance, leaving investors with diminished clarity regarding the central bank’s next move, according to derivatives analytics firm Block Scholes.
“Tomorrow’s FOMC meeting, Kevin Warsh’s second as chairman of the Fed, is one of the most uncertain in years,” said Thahbib Rahman, research analyst at Block Scholes. Examining every Federal Reserve meeting since 2015, he noted that only two events saw markets more divided over the anticipated outcome.
Signs of Decoupling
Even with this uncertainty hanging over markets, bitcoin has largely maintained its ground in July while chipmakers and other AI-focused stocks have faced sustained pressure, raising the possibility that crypto is beginning to diverge, at least at the margins, from traditional risk assets.
