Optimism creeps back into crypto, with the 2022 test still to come
Your day-ahead look for Sept. 17, 2026
Cryptocurrencies rallied after the Federal Reserve delivered its first interest-rate increase since July 2023, a counterintuitive reaction given the FOMC decision makes interest-bearing investments more attractive.
Bitcoin is currently about 40% below its October record high of $126,000. When the Fed began tightening in March 2022, it was also roughly 40% below its record high, the November 2021 peak.
Over the next 12 days, the largest cryptocurrency rallied 18% before sliding 50% for several months, a period that also saw the collapse of crypto exchange FTX.
The complication is that the Fed is tightening into a supply shock it cannot reach. Core inflation has eased to 2.4%, its lowest in five years, but both Brent and WTI crude are above $100 and U.S. diesel prices hit a record this week, while the 10-year Treasury yield sits at 5%.