Fed's "Hold or Hike?" Coin Flip Has Bitcoin Doing Its Best "Not My Problem" 🎲

Bitcoin held near $63,786.45 on Tuesday after recovering from intra-day losses, trading flat just below $64,000 as AI-linked technology stocks extended a July slump ahead of Wednesday's Federal Reserve decision. Markets priced a 70% probability that the Fed leaves rates unchanged and a 30% chance of a surprise 25-basis-point hike, according to CME FedWatch data. The split marks one of the most uncertain Federal Open Market Committee meetings in years, with only two Fed meetings since 2015 drawing a more divided market. Federal Reserve Chair Kevin Warsh's reduced use of forward guidance has left investors with less clarity on 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. Bitcoin is up roughly 6% for the month even as chipmakers and other AI-related equities have come under pressure, a divergence analysts say points to a weakening correlation between BTC and broader risk assets. Vetle Lunde, head of research at K33 Research, wrote in a Tuesday report that softer correlations were expected given the Nasdaq's strong July momentum and stretched positioning alongside bitcoin's consolidation near multi-year lows. "As a result, this week's FOMC meeting may have a more limited impact on BTC than in previous periods of heightened policy uncertainty," Lunde said.

Block Scholes noted that the divergence between equities and bitcoin has grown more pronounced this month, suggesting crypto may be less exposed than AI-driven tech stocks to the outcome of Wednesday's policy decision. Traders are watching whether any dovish signal from the Fed could provide additional support to BTC, which has largely traded in a range above $63,000 through late July.