Markets remain uncertain about whether the Federal Reserve will increase interest rates or keep them unchanged at Wednesday’s meeting, but analysts believe Bitcoin could prove more resilient than AI-related technology stocks.
Bitcoin erased earlier losses on Tuesday and traded largely unchanged near the $64,000 level, while artificial intelligence-focused stocks continued to face selling pressure ahead of one of the most unpredictable Fed decisions in recent years.
CME FedWatch data indicates that traders are pricing in a 70% likelihood of the Fed maintaining current rates and a 30% chance of a surprise 25-basis-point hike. According to derivatives analytics firm Block Scholes, the uncertainty reflects Fed Chair Kevin Warsh’s limited use of forward guidance, leaving markets with fewer clues about the central bank’s next policy move.
“Tomorrow’s FOMC meeting, Kevin Warsh’s second as Fed chair, is among the most uncertain in recent history,” said Thahbib Rahman, a research analyst at Block Scholes. He noted that only two Fed meetings since 2015 have recorded higher levels of market uncertainty regarding the outcome.
Bitcoin Shows Growing Independence From AI Stocks
Despite the uncertainty surrounding monetary policy, Bitcoin has remained relatively steady throughout July, while chipmakers and other AI-related companies have faced significant pressure. The trend suggests crypto may be starting to show some separation from traditional risk assets.
“With the Nasdaq entering July after a strong rally and increasingly stretched positioning, while BTC continues to consolidate near multi-year lows, weaker correlations are to be expected,” Vetle Lunde, head of research at K33 Research, wrote in a Tuesday report.
Lunde said the changing market relationship could limit the impact of this week’s Fed decision on Bitcoin compared with previous periods of heightened monetary policy uncertainty.
The divergence between equities and Bitcoin has become more noticeable this month, according to Block Scholes. Bitcoin has risen about 6% in July, while the S&P 500 has remained mostly unchanged and semiconductor stocks have declined by nearly 20%.
Rahman said market expectations have shifted sharply over the past month as weaker inflation data competed with renewed concerns about geopolitical tensions, rising oil prices, and tariff-related uncertainty.
Even with those challenges, crypto market sentiment has continued to improve, he said.
Rahman added that any signal from Fed Chair Warsh that leans even slightly toward easier monetary policy could help Bitcoin continue outperforming other risk assets.
