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Will Bitcoin Soar Following Interest Rate Cuts? Insights for September 17

· By Dave Wolfy Wealth · 3 min read


The looming decision on interest rate cuts by the Federal Reserve has the cryptocurrency market holding its breath. As of early September 2025, recent economic data from the United States is painting a picture of an economy in noticeable slowdown, which could have significant repercussions for Bitcoin and the broader crypto space. What can investors expect as the Fed’s September 17 meeting approaches?

Weakening US Labor Market Signals Imminent Rate Cuts

The key economic indicator driving market expectations is the U.S. labor market, an area that has displayed marked signs of weakening in recent months. The latest payroll report—a central gauge monitored by the Federal Reserve—showed that only 22,000 new jobs were created in August, far below the anticipated 75,000, while the unemployment rate crept up to 4.3%. Beyond just a slow hiring trend, revisions to previous months’ data revealed that in June, the U.S. actually lost more jobs than it created, marking the worst performance since 2021. This sustained deterioration signals a cooling economy that is struggling to maintain previous levels of job growth, exerting pressure on the Fed to ease monetary policy. Historically, when job markets falter, the central bank typically responds by lowering interest rates to stimulate borrowing, spending, and investment.

Why Rate Cuts Could Boost Bitcoin and Altcoins

Lower interest rates generally lead to cheaper borrowing costs and increased liquidity circulating in financial markets. For crypto investors, this environment often translates into an influx of capital flowing towards riskier assets like cryptocurrencies. The logic is straightforward: when yields on traditional investments are low, assets with potential for high returns — including Bitcoin and altcoins — become more attractive.

Moreover, market analysis suggests that ongoing rate cuts could trigger a strong final quarter for crypto in 2025. There's considerable speculation about an “alt season” — a period where alternative cryptocurrencies outperform Bitcoin — as investors seek diverse opportunities in the crypto ecosystem backed by easing monetary conditions.

Federal Reserve’s Stance and Political Pressure

The Federal Reserve’s communication, particularly comments from Chairman Jerome Powell at the recent Jackson Hole symposium, reaffirm the seriousness with which policymakers view the weakening labor market. Powell explicitly identified a deteriorating job market as the foremost risk facing the U.S. economy right now, implying that rate cuts are imminent.

Adding political pressure, former President Donald Trump has publicly criticized Powell for not acting sooner with rate cuts, emphasizing the need to reduce borrowing costs and lower unemployment ahead of potential election cycles. Such political dynamics further underscore the Fed’s inclination to respond with monetary easing.

What to Watch for on September 17

The September 17 Federal Open Market Committee (FOMC) meeting will be pivotal. Investors will scrutinize:

  • The official stance on rate cuts: Will the Fed confirm multiple reductions before year-end?
  • Forward guidance: How quickly and aggressively will the Fed act to lower rates?
  • Economic outlook updates: Does the Fed foresee a sustained economic slowdown?

The crypto market’s reaction will likely hinge on these signals. Confirmed rate cuts could catalyze a surge in Bitcoin and altcoins, marking a strong finish to 2025. However, investors should remain mindful of other factors such as regulatory developments, global economic shifts, and market sentiment that may also shape crypto dynamics.

Conclusion

With US labor market data signaling economic deceleration and Federal Reserve leadership hinting at imminent interest rate cuts, the conditions appear ripe for a potential crypto rally in the months ahead. As September 17 approaches, watch for the Fed’s signals carefully—these could set the stage for Bitcoin and altcoins to possibly soar, sparking an exciting phase in the crypto market’s 2025 cycle.

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.

About the author

Dave Wolfy Wealth Dave Wolfy Wealth
Updated on Sep 6, 2025