Key takeaways
The Federal Reserve raised its benchmark rate by 25 basis points to a target range of 3.75% to 4%, its first increase since 2023.
Markets had already accounted for the move, so bitcoin held near its level from before the decision rather than dropping.
Higher rates have often acted as a headwind for crypto, though bitcoin showed resilience this time.
The Federal Reserve's own projections point to at least one more increase this year, so a calm, long horizon matters more than any single meeting.
What did the Federal Reserve decide?
On 16 September 2026, the Federal Open Market Committee (FOMC) raised its benchmark rate by 25 basis points to a target range of 3.75% to 4%, its first increase since 2023. The vote was unanimous, and the increase aims to bring inflation back toward the Federal Reserve's 2% target.
Why does a rate rise matter for crypto?
When the Federal Reserve raises rates, borrowing costs climb, bond yields rise, and cash and government debt start to pay more. That can pull money toward lower volatility assets and away from growth assets, crypto included. Higher rates have often acted as a headwind for bitcoin in the past. This time the picture was more measured, for one main reason: the market saw it coming.
Why bitcoin held steady this time
Bitcoin held close to its level from before the announcement because traders had already accounted for the increase. It slipped during the session, then held near $76,000. A move that markets expect tends to be absorbed in advance, so the decision itself carried less weight than the tone that followed it.
There is a constructive read here. Bitcoin took a policy change that would once have unsettled it, and it did so while share markets came under similar pressure. For anyone holding over the long term, that resilience is worth noting.
What this could mean for your holdings
For most people holding crypto over a longer horizon, one meeting changes little. Bitcoin's case has rested on adoption, its fixed supply, and its role as a possible store of value, none of which turn on a single rate decision. If you bought with a multi year view, a 25 basis point move sits within the normal range of what markets do.
Considerations to keep in mind
The path ahead is not one directional. The Federal Reserve's projections point to at least one more increase before the end of the year, and the tone from the meeting suggested inflation remains above target. Crypto markets also face separate pressures at the moment. These include movements in exchange traded fund (ETF) flows and the CLARITY Act, a United States crypto market structure bill that stalled in the Senate. Crypto prices can fall as well as rise, and the value of your holdings can change within a short period.
Approaching crypto when rates are rising
A rate decision is one input among many, and over a long horizon it tends to matter less than it does in the moment. Here are a few ideas that shape how many crypto investors think through periods like this.
Time horizon guides how people weigh short term moves. Investors with a multi year view tend to read a single rate decision as one data point rather than a turning point.
Some investors build a position in stages across time rather than in a single purchase, which can smooth out the effect of short term price swings. This approach is known as rand cost averaging.
Regulation and security feature in how many people choose where to hold their crypto. Luno is a licensed financial services provider, and you can buy and store bitcoin safely on the platform.
Frequently asked questions
What does it mean when the Federal Reserve raises interest rates?
The Federal Reserve raises its benchmark rate to cool the economy and bring inflation down toward its target. Higher rates lift borrowing costs and increase the return on cash and government debt.What is a basis point?
A basis point is one hundredth of a percentage point. A rise of 25 basis points means an increase of 0.25 of a percentage point, so a range of 3.75% to 4%.How do interest rates affect bitcoin and crypto?
When rates rise, cash and bonds pay more, which can draw money toward lower volatility assets and away from growth assets like crypto. Higher rates have often acted as a headwind for bitcoin. The effect varies, and markets tend to account for an expected move before it happens.Does a rate rise always push crypto down?
No. The relationship is not fixed. When markets expect a move, they tend to price it in ahead of the decision, so the reaction on the day can be muted. The tone of the guidance that follows often matters more than the decision itself.Why is bitcoin dropping?
Bitcoin can fall for many reasons, including interest rate shifts, the strength of the US dollar, market sentiment, regulation, and movements in exchange traded fund flows. More than one of these can act at the same time.Will bitcoin recover after a rate rise?
No one can predict short term prices. Bitcoin has moved through many rate cycles before, and its longer arc has been shaped more by adoption and supply than by any single meeting. Past patterns do not guarantee future results.
