Bitcoin's Relationship with the Fed: A Complicated Evolution

A recent review of nine years' worth of data on the Federal Reserve's policies and their impact on Bitcoin reveals that the cryptocurrency's relationship with the Fed has evolved over time, rather than decoupling from it.

The study analyzed data from January 2017 to September 15, 2026, covering 2438 trading days and 62 FOMC meetings. It found that during a year of quantitative easing and rate cuts (October 2025-September 2026), Bitcoin's price dropped by 38%, while equities rose.

This contradicts the traditional logic that rate cuts and quantitative easing lead to price increases for crypto assets. The study suggests that the correlation between M2 growth and BTC returns shifted from positive to negative (-0.766) in recent high-rate phases, indicating that liquidity expansion no longer guarantees price increases for crypto assets.

The researchers also isolated FOMC meeting days for event analysis and found a significant difference in the average daily change in the 2-year Treasury yield on FOMC days (6.34 basis points) compared to non-FOMC days (3.89 basis points).