Grayscale Rules Out Major Crypto Shifts From a Second 2026 Hike
Grayscale says the Federal Reserve’s latest rate hike will not drive major changes in crypto markets. Nor would a second increase this year.
Head of Research Zach Pandl published the note on Thursday. The Federal Open Market Committee (FOMC) had raised its target range to 3.75%-4.00% a day earlier.
Why 1997 Matters More Than 2022
Pandl drew a line between two very different Fed moves. The central bank began a cyclical shift in March 2022 to contain inflation.
It raised rates by 550 basis points by July 2023. That lifted the opportunity cost of holding Bitcoin (BTC) and similar non-interest-bearing assets.
Wednesday’s quarter-point move carries no such weight, he argues. Traders sided with Pandl this week, and Bitcoin climbed instead of selling off.
His reference point is March 1997, when Alan Greenspan’s Fed delivered a one-off hike. The Nasdaq bull market kept running.
“We believe yesterday’s move was a mid-cycle adjustment, not a cyclical change. And we doubt the one or two rate hikes expected for 2026 will lead to much change in capital allocation,” Pandl wrote.
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Pandl does see uneven effects inside crypto. Stablecoin issuers such as Circle and Tether collect more revenue when cash rates rise. Higher yields on tokenized bonds and money market funds could also pull capital onchain.
“Crypto is diverse, and higher rates affect certain assets differently than others, just like in traditional finance,” he added.
Traders Put 88% Odds on Another Hike by December
Meanwhile, traders assign 54.2% odds to another increase at the October 28 meeting, according to CME FedWatch data.
By the December 9 meeting, traders see an 88.2% chance that the range sits higher than today. A further 40.3% put it at 4.25%-4.50%, or 50 basis points above the current level.
Policymakers are close behind. Projections show 16 of 18 officials expect at least one more increase in 2026.
FED LIFTS PROJECTED RATE PATH ACROSS 2026-2028
— Wall St Engine (@wallstengine) September 16, 2026
The Fed now projects one more hike this year, followed by one cut by the end of 2028.
2026: 4.1% vs 3.8% in June
2027: 4.1% vs 3.6%
2028: 3.9% vs 3.4%
Long run: 3.2% vs 3.1%
12 of 18 officials expect another hike this year. pic.twitter.com/BZwY6ydqCp
Pandl’s framing faces its real test if the Fed moves again in December. That decision would show whether crypto reads this cycle as a blip or a turn.
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