Fed's Monopoly Over BTC Cracked: Study Finds Complex Relationship Between Central Bank Policy and Crypto Prices

A nine-year review of Federal Reserve policy and its impact on Bitcoin (BTC) has revealed that the relationship between the two is more complex than previously thought. The study, which analyzed data from January 2017 to September 15, 2026, found that BTC's price movements are not directly correlated with monetary policy decisions.

During a period of quantitative easing and rate cuts from October 2025 to September 2026, the Federal Reserve expanded its balance sheet by $150 billion and reduced interest rates. Despite this increase in liquidity, BTC fell by 38.2%, while the Nasdaq 100 rose 16.8% and the S&P 500 rose 13%. This contradicts the traditional view that quantitative easing leads to price increases for crypto assets.

The study also found that the correlation between M2 growth and BTC returns shifted from positive to negative in recent high-rate phases, indicating that liquidity expansion no longer guarantees price increases for crypto assets. The researchers used a cointegration test to examine the relationship between ln(BTC) and ln(M2), which showed no long-term equilibrium.