Why Uncertainty for Federal Reserve and Bitcoin Looms in 2026

As expected, the Federal Reserve has cut interest rates once again — taking them to their lowest level in three years.

But it wasn’t a unanimous decision, with 25% of members on the Federal Open Markets Committee voting against the move.

Unsurprisingly, Donald Trump wasn’t happy either. He wanted a 0.5 percentage point reduction, rather than the 0.25 confirmed by Jerome Powell.

Bitcoin briefly spiked on the news — reaching $94,000 — but soon started to fall away as concerns about artificial intelligence emerged once again.

The world’s biggest cryptocurrency is now clinging on to $90,000, with many smaller altcoins posting outsized losses on a 24-hour timeframe.

A great deal of uncertainty now lies ahead for both the Federal Reserve and for Bitcoin as we head into 2026.

Fed chair Jerome Powell has suggested that it will be difficult to justify further interest rate cuts — and indeed, policymakers are only expecting one reduction next year. Some think rates will have to be increased by next December.

But these predictions may end up carrying little weight considering Powell’s term is about to come to an end, with Trump deciding who should be his successor.

As Cryptonews previously reported, all five of the names on a shortlist that emerged in October are pro-Bitcoin — but crucially, they are also more likely to align with the president’s wishes for the cost of borrowing to be cut drastically.

Kevin Hassett, who currently serves as director of the White House’s National Economic Council, is widely regarded as a favorite for the role. This week, he went on the record as suggesting he was prepared to go much further with cuts.

“If the data suggests that we could do it, then — like right now — I think there’s plenty of room to do it.”

While much lower rates would be good news for Bitcoin, there are lingering concerns about how such an appointment could potentially undermine the Fed’s independence — with Donald Trump getting a far greater say over monetary policy. This in turn could end up spooking the markets.

The Coin Bureau’s investment analyst Nic Puckrin noted that Powell will remain at the helm for the first three interest rate decisions of 2026, and warned “markets are allergic to uncertainty.” He told Cryptonews:

“The announcement was not enough to spark a ‘Santa rally’ for Bitcoin, and I don’t see any other obvious catalysts from here on, barring any unexpected announcements from President Donald Trump. Even then, a dead cat bounce is a real possibility, as risk assets tend to care more about the Fed than just about anything else.”

Zooming out, YouHodler’s chief of markets Ruslan Lienkha told us that the global crypto market is currently in “mixed” health — and macroeconomic conditions now determine Bitcoin’s performance.

“Most of the internal, crypto-native growth drivers that fueled previous bull cycles are either already priced in or are expected to have a more gradual, long-term impact rather than generating immediate upside.”

Despite no shortage of optimism once Trump’s second term began — and no shortage of buying pressure from the likes of Strategy — 2025 will likely go down as a rather disappointing year for Bitcoin. Ambitious price targets set by major investment banks failed to materialize — with some, including Standard Chartered, now slashing their forecasts considerably.

The British financial institution had expected BTC to surge to $200,000 by the end of this year, but now expects the world’s biggest cryptocurrency to trade at about $100,000 instead. And while its analysts do believe Bitcoin will hit $500,000 one day, this milestone has been pushed further back to between 2028 and 2030.

Going forward, he believes that buying activity from BTC treasury companies will have less of an impact, and instead, it’s adoption through exchange-traded funds that will matter more in the years to come.

Over on Polymarket, the atmosphere is pretty gloomy. When asked whether BTC will hit $80,000 or $150,000 first, bettors say there’s an 81% chance that it will sink before it surges. There’s also 50/50 odds that Bitcoin will dip to $80,000 before reaching six-figure territory again.

Looking ahead, it seems that things might have to get worse before they get better.

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