Bitcoin prices experienced notable volatility this week as a combination of cautious monetary policy from the Federal Reserve and growing concerns over the profitability of artificial intelligence (AI) investments unsettled markets.
While the Fed’s recent decision to cut interest rates was expected, its divided stance and measured approach signaled a more cautious outlook for economic stimulus going forward.
At the same time, disappointing earnings forecasts and rising costs in the AI sector have rattled investor confidence, leading to increased pressure on Bitcoin prices. This convergence of factors highlights the delicate balance between policy uncertainty and technological innovation shaping today’s crypto market landscape.
Fed’s Rate Cut Divides Policymakers, Pressuring Bitcoin Prices
The Federal Reserve officially cut its benchmark interest rate by 25 basis points on Wednesday, marking the third reduction this year. This move lowered the federal funds rate to a range of 3.50% to 3.75%. While the cut was widely expected, disagreements among policymakers have introduced fresh uncertainty.
Two Fed members preferred to hold rates steady, while another advocated for a larger 50-basis-point cut. Fed Chair Jerome Powell emphasized that policy decisions would remain data dependent and not follow a preset path. Updated projections forecast only one more rate cut in 2026, a slower easing pace than markets had anticipated.
This cautious stance is making it difficult for Bitcoin prices to regain momentum, as investors remain doubtful about more aggressive monetary easing that typically supports speculative assets like cryptocurrencies.
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AI Profitability Concerns Add Pressure to Bitcoin Prices
In addition to the Fed’s cautious move, worries over AI investment profitability have further dampened Bitcoin prices. On Thursday, technology stocks came under pressure after US cloud computing giant Oracle reported disappointing earnings and revenue forecasts.
Oracle also flagged increased capital spending on AI infrastructure, which has yet to translate into the expected profits. This negative outlook spilled over into broader equity markets, reducing risk appetite and triggering declines in riskier assets, including Bitcoin.
The situation highlights that, despite being at the forefront of innovation, the technology sector’s near term profit uncertainties are causing investors to be wary, adding downward pressure on Bitcoin prices.
Bitcoin Price Forecasts and the Role of ETFs Moving Forward
Facing these challenging market conditions, some analysts have revised their Bitcoin price forecasts downward. Standard Chartered recently cut its price target for Bitcoin from $200,000 to $100,000 by the end of 2025.
Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered, noted that large-scale buying by Bitcoin treasury companies is likely over. He added that future increases in Bitcoin prices will largely depend on demand from exchange-traded funds (ETFs).
Also read: After the Fed’s Move, Can Bitcoin Prices Bounce Back Stronger?
Markets are also still awaiting clear signs that the heavy sell-off in early October has run its course. Other analysts suggest Bitcoin prices need stronger positive catalysts to break key psychological levels like $100,000.
Bitcoin prices are facing dual pressures from Fed’s cautious monetary policy and negative sentiment in the tech sector, particularly related to AI investments. Although interest rates were cut, the Fed’s divided stance has tempered market enthusiasm.
Disappointing outlooks from major tech firms like Oracle have further dampened risk appetite, pushing Bitcoin prices below the $90,000 mark.
Analysts now see ETFs as the primary driver for any future Bitcoin price gains, as the heavy buying by digital asset treasury companies appears to have slowed. The market awaits clearer signs of recovery to restore confidence and support a Bitcoin price rally.
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