Traders are uncertain about the Federal Reserve's decision on interest rates, but analysts believe that Bitcoin may be less affected than AI-focused tech stocks.

Currently, Bitcoin is trading at BTC$63,845.99, maintaining its position just below $64,000 after recovering from earlier losses. This stability comes amidst declines in AI-related technology stocks ahead of what is expected to be a pivotal Fed meeting.

According to CME FedWatch data, there is a 70% likelihood that the Fed will keep rates steady and a 30% chance of an unexpected 25-basis-point increase. This division in market sentiment is attributed to Fed Chair Kevin Warsh's limited forward guidance, leaving investors unsure of the central bank's next steps, as noted by the derivatives analytics firm Block Scholes.

Traders are unusually split ahead of Fed decision (CME FedWatch)

Thahbib Rahman, a research analyst at Block Scholes, remarked, "Tomorrow's FOMC meeting, Kevin Warsh's second as chairman of the Fed, is one of the most uncertain in years." He highlighted that only two meetings since 2015 have seen markets as divided over the outcome.

Signs of Market Decoupling

Despite the prevailing uncertainty, Bitcoin has shown resilience in July, while semiconductor stocks and other AI-related companies have faced significant declines. This trend suggests a possible divergence of cryptocurrencies from traditional risk assets.

Vetle Lunde, head of research at K33 Research, noted in a report that as the Nasdaq faced pressure entering July, Bitcoin's position near multi-year lows might lead to weaker correlations with equities. He stated, "As a result, this week's FOMC meeting may have a more limited impact on BTC than in previous periods of heightened policy uncertainty."

Block Scholes reported that the divergence between stocks and Bitcoin has become increasingly evident this month, with Bitcoin rising about 6% while the S&P 500 has remained relatively flat and semiconductor stocks have dropped nearly 20%.

Rahman pointed out that market expectations have fluctuated recently due to mixed signals from softer inflation data, geopolitical tensions, rising oil prices, and tariff concerns. Nevertheless, sentiment in the crypto market continues to improve.

He concluded, "Anything remotely dovish from Warsh could lead to BTC's outperformance continuing."

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