Uncovering the Depths of Disappointment: Why Bitcoin Drops Even as the Fed Cuts Rates

Why Bitcoin’s price keeps falling despite Federal Reserve rate cuts—and what it means for investors now.

Bitcoin investors expect a simple story: Fed cuts interest rates, money floods into risk assets, and Bitcoin rallies. But reality keeps disappointing. The last four Federal Reserve meetings saw rate cuts—and yet Bitcoin’s price dropped each time, including a harsh 30% plunge when the Fed went hawkish earlier. This article breaks down why most crypto traders get the Fed wrong, what’s really happening with monetary policy, and why now might be the time to quietly accumulate Bitcoin for the long haul.

Why Bitcoin Drops When the Fed Cuts Rates: Debunking the Myth

Most crypto investors expect lower interest rates to boost Bitcoin’s price. Lower rates typically mean cheaper borrowing and more liquidity, often bullish for risk assets. But Bitcoin defies this narrative lately—it’s been falling after several Fed meetings where rates were cut.

What gives?

The key is understanding what drives these rate cuts—and their deeper economic impact. The Federal Reserve’s ongoing rate cuts in 2025 aren’t a sign of a booming economy or easy money leading to asset rallies—they’re a reaction to economic weakness, inflation concerns, and efforts to maintain liquidity in a fragile system. Instead of sparking optimism, these cuts signal trouble brewing beneath the surface.

How Fed Rate Cuts Hurt the Average Person

Who really suffers from these rate cuts? It’s often not Wall Street but everyday people on fixed incomes or regular jobs. Rate cuts lower the value of the US dollar—the purchasing power of workers paid in dollars erodes as inflation eats away their wages. This is why the DXY, the dollar index, has been dropping.

The Fed’s rate cuts come with a hidden cost: rising inflation, weaker currency, and growing inequality. Most crypto bulls don’t want to acknowledge this harsh reality.

Behind the Scenes: The Fed’s Puppet Show and Quantitative Easing (QE)

You may hear that the Fed’s recent $40 billion monthly Treasury bill purchases aren’t QE—or quantitative easing, which means printing money to buy government debt. But this is a semantic trap.

If an action adds net permanent dollar liquidity to the system, it’s effectively QE—and the Fed’s current operations fit that description. This means more dollars flooding the financial system, further devaluing the currency.

Fed Officials Show Division—but Really Don’t

According to the latest Fed dot plot, six officials wanted no rate change, seven expected no hikes next year, and others pushed for cuts. Sounds like a split, but it’s theater. The Fed is controlled by elite families that influence policy behind closed doors. Public disagreements mask a unified strategy: devalue the dollar to support the financial system while enriching insiders.

Books like The Creature from Jekyll Island and Money Masters offer detailed insights into the Fed’s true owners and motives. This isn't conspiracy theory—it's studied economic history.

The Economic Storm Ahead: Inflation, Job Losses, and Automation

Jerome Powell admitted job gains may be overstated by 60,000 recently. The US economy is sputtering. Adding fuel to the fire:

• AI and robotics threaten to automate at least 50% of current American jobs.
• Tariffs keep inflation sticky by raising costs on goods.
• Rate cuts aimed at stimulating growth ironically worsen inflation by devaluing the dollar further.

The Fed is printing about $1 trillion every 70 days. This will only accelerate toward a predicted $1 trillion every 20 days or even per day near the next election. The US dollar’s collapse seems baked in over the medium term.

What Should Bitcoin Investors Do Now?

Given this macro chaos, the video’s host recommends buying Bitcoin and dollar-cost averaging on the way down. Short-term price moves or volatility don’t really matter in this climate. The incoming wave of fiat devaluation should make Bitcoin’s fixed supply increasingly valuable over time.

But beware: this is no longer a playground for amateurs. Wall Street dominates the crypto scene now. Leveraged trading can wipe out beginners fast. Smart investors stay in for the long haul and avoid risky setups.

Answer Box: Why Does Bitcoin Drop When the Fed Cuts Interest Rates?

Bitcoin’s recent price drops after Federal Reserve rate cuts happen because the cuts signal economic weakness and increased monetary easing that devalues the US dollar. Instead of boosting risk appetite, these conditions create uncertainty, inflation fears, and liquidity concerns that weigh on Bitcoin short-term.

Data Callout: Fed Printing Pace Accelerates

• Fed prints ~$1 trillion every ~70 days today
• Predicted to hit $1 trillion every 20 days next cycle
• Potential for $1 trillion daily around next election

This accelerating money printing signals aggressive monetary easing and dollar debasement.

Risks / What Could Go Wrong

• Cryptocurrency Regulatory Crackdowns: Governments may increase oversight, affecting market sentiment.
• Short-term Volatility: Bitcoin price may keep falling amid macroeconomic shocks or sentiment swings.
• Prolonged Dollar Strength: Unexpected global events could bolster the US dollar, pressuring Bitcoin.
• Technological Risks: Advances in quantum computing could threaten Bitcoin’s cryptography (a long-term risk).
• Fed Policy Shifts: Sudden hawkish moves could disrupt markets more violently than expected.

Investors must prepare for volatility and avoid overleveraging.

Actionable Summary

• Bitcoin’s price drops after Fed rate cuts highlight misunderstood economic dynamics.
• Fed rate cuts now signal economic distress and dollar devaluation, hurting everyday Americans.
• Quantitative easing is ongoing in disguise, adding to inflation and currency debasement.
• Long-term Bitcoin accumulation via dollar-cost averaging is a prudent strategy.
• The crypto scene is dominated by Wall Street; amateur leveraged trading risks liquidation.

Consider Wolfy Wealth PRO for Deeper Insight

Navigating these complex macro forces requires discipline and deep insight. Wolfy Wealth PRO provides timely alerts, risk rules, model portfolios, and expert analysis to help you stay ahead. Get the full playbook and entries in today’s Wolfy Wealth PRO brief.

FAQ

1. Why doesn’t Bitcoin rally after the Fed cuts interest rates?
Because these cuts often reflect underlying economic weakness and increase money printing, leading to uncertainty and inflation fears that can suppress Bitcoin’s short-term price.

2. What is quantitative easing (QE) and why does it matter?
QE is when the Fed injects liquidity by buying government debt, effectively printing money. This increases dollar supply, leading to inflation and dollar devaluation, which can impact Bitcoin’s price dynamics.

3. How does inflation affect Bitcoin investors?
Inflation erodes the purchasing power of fiat currency. Bitcoin’s fixed supply makes it a potential hedge, as its scarcity can protect against dollar devaluation over time.

4. Should I trade Bitcoin with leverage in the current market?
Leverage increases risk dramatically, especially as Wall Street dominates the space. It’s safer to avoid leverage unless you have clear risk controls.

5. How can I keep learning about crypto and central banks?
Books like The Creature from Jekyll Island and Money Masters provide historical context. Wolfy Wealth also offers guides and community support for navigating today’s markets.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investor risk varies. Always conduct your own research.

By Wolfy Wealth - Empowering crypto investors since 2016

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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile