Bitcoin Recovers to $85K Amid Fed-Driven Stock Rally, But an Analyst Signals Possible Downside

Bitcoin Climbs to $85,500 After Fed Decision, Gold Hits Record $3,050

Gold continues to dominate the market cycle, setting a new all-time high above $3,050 per ounce, while crypto markets experience modest gains following the Federal Reserve’s decision to hold interest rates steady at 4.25%-4.50%.

Bitcoin (BTC) is up 4.5% in the past 24 hours, trading at $85,500—its highest level since March 9.

The CoinDesk 20 index, which tracks major cryptocurrencies excluding stablecoins, meme coins, and exchange tokens, has gained 6%. Leading altcoins like Ether (ETH) and Solana (SOL) have jumped 7%, while XRP surged 10% after Ripple CEO Brad Garlinghouse revealed that the SEC may drop its lawsuit against the company.

Crypto-related stocks also saw strong movement. Bitcoin mining firms Bitdeer (BTDR) and Core Scientific (CORZ) rose 10% and 8%, respectively. Bitdeer likely benefited from progress in its ASIC manufacturing process and news that stablecoin giant Tether has expanded its stake in the company to 21%. Core Scientific may be riding the momentum of its top client, AI powerhouse CoreWeave, which recently filed for an IPO. Despite these gains, both stocks remain significantly down year-to-date.

During his post-FOMC remarks, Fed Chair Jerome Powell suggested that tariff-driven inflation is likely temporary and dismissed fears of an imminent recession. U.S. stock markets reacted positively, with the Nasdaq, S&P 500, and Dow Jones all climbing more than 1%.

Not all market watchers were convinced. Economist Mohamed A. El-Erian criticized Powell’s use of the word “transitory,” cautioning on X that the Fed should be more humble given past policy missteps. “It’s too early to confidently declare that the inflationary effects of tariffs will be short-lived,” he warned.

Meanwhile, gold continues to soar, reinforcing its position as a favored hedge in uncertain economic conditions. After breaking past $3,000 earlier in the week, the metal surged beyond $3,050 per ounce. Callie Cox, chief market strategist at Ritholtz Wealth Management, believes the Fed’s reluctance to cut rates aggressively could weigh on stocks. “The central bank no longer seems comfortable with a smooth transition to neutral policy. This could mark the end of the ‘soft landing’ narrative,” she noted.

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