What Happens to Crypto Prices When the Fed Cuts Interest Rates?

By Leo Sun – Apr 13, 2026 at 12:27PM ESTKey PointsRising interest rates will drive investors away from cryptocurrencies.Declining interest rates will bring them back.Many cryptocurrencies, including Bitcoin (BTC +1.60%) and Ethereum (ETH +1.33%), are highly sensitive to interest rate swings. Let's see why higher interest rates are generally bad for cryptocurrencies, and why they tend to rally when the Fed reduces those benchmark rates. Image source: Getty Images. How are cryptocurrencies affected by interest rates? When interest rates are low, it's easier for individuals and companies to take out cheap loans. Yields on fixed-income plays -- such as CDs, T-bills, and bonds -- also decline. Those factors often drive investors toward riskier investments, such as growth stocks and cryptocurrencies. But when interest rates rise, those investors rotate back toward safer investments. ExpandCRYPTO: BTCBitcoinToday's Change(1.60%) $1136.07Current Price$72340.00Key Data PointsMarket Cap$1.4TDay's Range$70617.00 - $72523.0052wk Range$60255.56 - $126079.89Volume40B In 2022 and 2023, the Fed raised its rates 11 consecutive times -- from nearly zero to 5.25%-5.50% -- to combat inflation. Those rate hikes triggered a "crypto winter," sending Bitcoin from about $48,000 to $16,000 and Ether from $3,900 to $900. Yet in 2024 to 2025, the Fed cut its rates six consecutive times, bringing them to their current range of 3.5%-3.75%. As that pressure eased, Bitcoin and Ether -- the "blue chip" cryptocurrencies -- bounced back. But many of the smaller altcoins remained out of favor. The lack of additional interest rate cuts in 2026 -- along with fears that inflation might trigger new rate hikes -- is chilling the crypto market. So if you're interested in buying cryptocurrencies today, you need to keep a close eye on the Fed's interest rate decisions. Read NextApr 13, 2026 •By Matt Frankel, CFPHow to Invest Money: A Step-by-Step Guide to Getting Good ReturnsApr 13, 2026 •By Matt Frankel, CFPWhat to Invest In Right Now, April 2026Apr 13, 2026 •By Neil PatelIs Bitcoin the Safest Cryptocurrency to Own for the Long Term?Apr 13, 2026 •By Dominic BasultoWhich Cryptocurrency Should You Be Hoarding Right Now, Bitcoin or Ethereum?Apr 13, 2026 •By Alex CarchidiHolding Some Bitcoin Just Helped Me Sleep Better At Night. Here's HowApr 13, 2026 •By Alex CarchidiStrategy's Michael Saylor Says "Bitcoin Has Won." Does That Make It a Buy?About the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLionStocks MentionedBitcoinCRYPTO: BTC$72,340.00(+1.60%)+$1,136.07EthereumCRYPTO: ETH$2,230.89(+1.33%)+$29.28*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.