Federal Reserve Cuts Rates for Third Time in 2025, Mixed Impact on Crypto Prices
On December 10, 2025, the Federal Reserve cut the federal funds rate by 0.25 percentage point, marking the third cut in 2025. Following the decision, Bitcoin traded around $92,000, down about 1.4% for the day, while Ethereum traded just above $3,300, up approximately 0.6%. In contrast, Solana fell about 3.2%.
The Fed announced it would resume purchases of short-term Treasury bills to maintain reserve levels, noting that reserve balances have declined to ample levels. The Federal Open Market Committee (FOMC) stated it would carefully assess incoming data and the evolving outlook before signaling any further rate cuts.
Prior to the decision, markets had priced in an 89% chance of a 0.25 percentage point cut for a third consecutive meeting. After the cut, the CME FedWatch tool indicated a 22% probability of another rate cut in January. The decision was not unanimous, with two FOMC members voting to hold rates steady.
The term of current Fed Chair Jerome Powell expires in May 2026. Kevin Hassett was discussed as a frontrunner for the next chair, with speculation around his nomination affecting expectations for crypto policy direction.
