Answer · confidence: partial
How have interest rates and stock market ups and downs affected bitcoin's price?
Research question: How have interest rate changes and stock market moves historically affected the bitcoin price?
Studies covering January 2015 to December 2023 found that U.S. monetary policy shocks are associated with lower cryptocurrency prices and volatility 1, and that rate increases are linked to lower prices and volatility when prices are already high 2. Rate changes affect the opportunity cost of holding crypto relative to interest-bearing assets 4. However, a 2026 study of FOMC event windows found that actual Fed rate changes did not robustly explain bitcoin returns 8, and returns around announcements showed little systematic difference from zero 12. Bitcoin's own volatility was higher on FOMC announcement days (about 23.1 versus 17.3 on other days) 15, and in August 2026 it still finished up about 23% despite jumping hike odds 13. The newest fact is from August 2026, about two months before the current date of October 2026, and the evidence does not clearly establish a consistent direction of effect.
Checked 2026-10-22. Only documented and supported facts are used.
Dig deeper on this questionSources
[1] supported
Monetary policy shocks in the U.S. are associated with a decrease in cryptocurrency prices and volatility.
"This study reveals that monetary policy shocks result in a decrease in cryptocurrency prices and volatility."Cryptocurrency Responses to U.S. Monetary Policy Shocks: A Data-Driven Exploration of Price and Volatility Patterns (2024)
[2] supported
When cryptocurrency prices are already high, interest rate increases are associated with lower cryptocurrency prices and lower volatility.
"In higher price states, interest rate increases are associated with reduced cryptocurrency prices and volatility."Cryptocurrency Responses to U.S. Monetary Policy Shocks: A Data-Driven Exploration of Price and Volatility Patterns (2024)
[3] supported
Monetary policy tightening is associated with stabilizing the cryptocurrency market when prices are low.
"Moreover, monetary policy tightening stabilizes the market at low cryptocurrency prices."Cryptocurrency Responses to U.S. Monetary Policy Shocks: A Data-Driven Exploration of Price and Volatility Patterns (2024)
[4] supported
Changes in interest rates affect the opportunity cost of holding cryptocurrencies, which changes their appeal relative to traditional interest-bearing assets.
"The findings suggest that changes in interest rates influence the opportunity cost of holding cryptocurrencies, impacting their appeal compared with traditional interest-bearing assets."Cryptocurrency Responses to U.S. Monetary Policy Shocks: A Data-Driven Exploration of Price and Volatility Patterns (2024)
[5] supported
In the study's analysis of the SVB collapse period, bitcoin played a pivotal role in both transmitting and receiving spillovers across asset markets, including equities.
"Results indicate bitcoin's pivotal role in transmitting and receiving spillovers, with Technology Select Sector SPDR also prominent."Analysing the Spillover Effects of Silicon Valley Bank's Collapse Across Equity, Bonds, Crude Oil, Clean Energy, and Bitcoin Markets (2024)
[6] supported
Spillovers between the markets studied were strongest in the short term and weakened over medium and long horizons.
"Short-term spillovers were most evident, diminishing over the medium and long term, suggesting increased diversification potential."Analysing the Spillover Effects of Silicon Valley Bank's Collapse Across Equity, Bonds, Crude Oil, Clean Energy, and Bitcoin Markets (2024)
[7] documented
After the first Federal Open Market Committee announcement related to COVID-19, Bitcoin and the other studied cryptocurrencies except Tether showed a significant negative abnormal return about four days later.
"The empirical results show that the first FOMC event has a negative significant effect after 4 days of the announcement date for all studied cryptocurrencies except Tether."Cryptocurrency bubble risk and the FOMC announcements during COVID-19 black swan event (2021)
[8] supported
Actual Fed rate changes and hike/cut/hold categories did not robustly explain bitcoin and other crypto returns around FOMC announcements.
"Actual rate changes, policy-direction categories, and asymmetric hike/cut magnitudes do not robustly explain event-window returns, and crypto-specific interaction models provide no stable evidence of heterogeneous sensitivity across assets."Federal Reserve Rate Decisions, Risk Sentiment, and Cryptocurrency Returns: Evidence from FOMC Event Windows (2026)
[9] documented
Cumulative abnormal returns around the first COVID-19-related FOMC announcement were significant over several event windows starting three days before the announcement.
"The results also indicate that cumulative abnormal returns are significant during the event windows of (−3,8), (−3,9), and (−3,10)."Cryptocurrency bubble risk and the FOMC announcements during COVID-19 black swan event (2021)
[10] supported
Changes in the VIX, a measure of market risk sentiment, were negatively and significantly associated with cryptocurrency returns in several FOMC event windows.
"By contrast, VIX changes are negatively and significantly associated with cryptocurrency returns in several windows, while DXY effects are weak and unstable."Federal Reserve Rate Decisions, Risk Sentiment, and Cryptocurrency Returns: Evidence from FOMC Event Windows (2026)
[11] supported
Bitcoin, Ethereum and Litecoin showed short price bubbles lasting only a few days during the COVID-19 period, which the study linked to FOMC announcement dates.
"Besides, we find that Bitcoin, Ethereum and, Litecoin lived short bubbles lasting for a few days."Cryptocurrency bubble risk and the FOMC announcements during COVID-19 black swan event (2021)
[12] supported
Around FOMC announcements, cryptocurrency returns showed little systematic difference from zero.
"The results provide little evidence that cryptocurrency returns differ systematically from zero around FOMC announcements."Federal Reserve Rate Decisions, Risk Sentiment, and Cryptocurrency Returns: Evidence from FOMC Event Windows (2026)
[13] supported
Bitcoin still finished August 2026 up about 23% even though September hike odds jumped after Warsh's hawkish Jackson Hole speech.
"And after Warsh’s hawkish Jackson Hole speech , Reuters reported that September hike odds jumped from 35.4% to 55.7% , yet Bitcoin still finished August up around 23% after rallying from roughly $63,000 to above $80,000."The Fed Just Hiked for the First Time Since 2023 . Here Why Bitcoin Barely Moved (memeburn.com, 2026-09)
[14] supported
Corbet et al. showed that Bitcoin and other cryptocurrency markets are sensitive to global macroeconomic news and digital asset-related announcements.
"cryptocurrency markets, notably Bitcoin, are sensitive to global macroeconomic news and digital asset-related announcements"Modeling Cryptocurrency Market Volatility during FOMC Announcements: Evidence from High-Frequency Data (2024)
[15] supported
In the study's sample, average realized volatility of Bitcoin was about 23.1 on FOMC announcement days versus about 17.3 on other days, so volatility rises during the announcement period.
"Hence, Table 1 obviously shows that volatility dramatically increases during the announcement period."Modeling Cryptocurrency Market Volatility during FOMC Announcements: Evidence from High-Frequency Data (2024)