Bitcoin (BTC) and Top Altcoins Are at Risk as the Federal Reserve Delivers Its Interest Rate Decision

Bitcoin and other altcoins are at risk as the Federal Reserve delivers its interest rate decision on Wednesday. This risk explains why BTC and top altcoins like Cardano, Jasmy, Dogecoin, and Shiba Inu have all retreated this week.

Federal Reserve interest rate hikes are a hot topic in the cryptocurrency market now. This is because they could affect the performance of Bitcoin and other altcoins.

One economist has now issued a warning over the upcoming interest rate decision.

Economist Warns Of Fewer Rate Cuts

Jim Bianco, an economist at Bianco Research, has warned that the Federal Reserve will deliver fewer interest rate cuts this year than many economists expect.

In an X post on Tuesday, Bianco said that he expects the Fed to keep rates intact at 4.50% at its May meeting, macroeconomic signals.

He said:

“May (blue) = 2% probability, 98% holdJune (orange) = 33% cut, 66% holdJuly (green) = 68% cut, 32% holdAnd the trend has been toward fewer, not more, cuts. Why is the Fed off the table? Short answer: inflation”

The economist added that he expects the first cut to come in July. In his statement, he said that the “elephant in the room” was inflation.

Although recent data showed a drop in headline and core inflation in March, Bianco expects Trump’s tariffs to push them higher. He cited the recent inflation expectation data, which showed that many people expect that prices will surge to the highest level in over 40 years.

While energy prices have dipped, there are signs that inflation will continue rising as companies adjust their prices to maintain their margins.

Still, other analysts have a different opinion on the path of interest rates, with Goldman Sachs expecting three cuts this year. 20% of Polymarket traders anticipate three rate cuts this year, while 19% anticipate two.

What It Means For Cardano, Jasmy, Dogecoin, And Shiba Inu

Bitcoin and altcoins have remained volatile this week as investors are interested to see what the Fed will do next.

These assets typically perform well when the Federal Reserve reduces rates or hints at future reductions. For instance, all these coins soared during the COVID pandemic as the Fed slashed interest rates to zero and introduced a quantitative easing policy.

They all plunged in 2022 as the Fed began raising interest rates to handle the rising inflation. Most recently, the crypto rally was due to the Fed cuts. So, a dovish tone on Wednesday could lead to more altcoins gaining, while a more hawkish tone will likely result in lower prices.

On the positive side, as previously mentioned, Bitcoin has several catalysts, such as the rising ETF inflows and technicals, which may push it to a record high later this year.

All Bitcoin needs is for its price to move above the key resistance at $100,000, and FOMO will kick in, pushing it to a record high. This also explains why most analysts are bullish on Bitcoin, with BlackRock expecting BTC to reach $700,000 in the long term.

Such a bullish Bitcoin price forecast would lead to higher altcoin prices that would benefit the likes of Cardano, Jasmy, and Dogecoin.