The market is once again demonstrating the classic dependence of cryptocurrencies on the macroeconomic backdrop. The key signal for digital asset investors has changed dramatically: the probability of a Federal Reserve (Fed) rate hike in September has collapsed to 50%. Just on Thursday, this figure stood at 70%, and a week earlier it had even dropped to 37%. Such volatility in expectations is a stark indicator of the nervousness prevailing among institutional players.
Market split: pause or tightening?
The futures market, which I closely track via CME's FedWatch tool, is now split almost in half. Some traders are pricing in rates holding at 3.50–3.75%, while the other half expects a 25-basis-point hike to the 3.75–4.00% range. Moreover, the planning horizon has shifted: the scenario of two consecutive hikes, which seemed the baseline for December 2026 at the start of the week, is now being pushed back to March 2027. Clearly, the market is revising its models in real time.
The Iran factor and oil pressure
The reason for such sharp swings lies not only in inflation statistics but also in geopolitics. Escalation around Iran and the associated turbulence in the oil market directly affect Treasury yields and, consequently, the cost of risk assets. Fed Chair Kevin Warsh at a recent Jackson Hole meeting failed to give the market a clear signal: within the regulator itself, there appears to be no unity on whether to continue policy tightening. This adds to the uncertainty.
Bitcoin, as an asset highly sensitive to liquidity, reacted immediately. Over the week, the flagship cryptocurrency's price broke through the psychologically important level of $80,000, responding to rumors of a possible de-escalation of the conflict, and on Friday settled around $81,000, gaining about 5% in a day. A weaker dollar and falling bond yields amid declining rate expectations created a favorable backdrop for BTC buyers.
The continuation of the upward trend until the Fed meeting on September 16 will directly depend on two factors: developments around Iran and fresh inflation data due in the coming days. Any of these catalysts could once again reverse the market.
My analysis: The current dynamics are not just a reaction to news but a fundamental reassessment of risks. The drop in the probability of a rate hike to 50% makes bitcoin highly attractive for medium-term investors, yet the high sensitivity to geopolitical shocks serves as a reminder: in such an environment, volatility will be our constant companion, and positions are best hedged.