Bitcoin Braces for Fed Price Shock Ahead of Interest Rate Meeting

Bitcoin has staged a recent recovery, adding almost 15% to its price since hitting lows of $57,000 per coin in recent weeks.

The rebound comes as traders and investors wait for the Federal Reserve's interest rate meeting, described by one analyst as 'one of the most uncertain in years'.

According to Thahbib Rahman, research analyst at Block Scholes, anything divisive from Fed chair Kevin Warsh could lead to bitcoin's outperformance continuing. The market is roughly 70/30 split on whether Fed officials will hold or hike rates.

Rahman notes that loosening of monetary policy usually provides a tailwind to risk assets like bitcoin and high-growth technology stocks, citing bitcoin's recent performance as an example.

However, not everyone agrees. Matthew Ryan, head of market strategy at Ebury, believes the Fed will sound hawkish even if it fails to deliver an interest rate hike, expecting the bank to rely on familiar phrases about 'elevated uncertainty' and a data-dependent approach.