Daily Crypto Briefing

Good Morning Blocksignal Community,

Executive Summary

Yesterday's dominant story was the Federal Reserve's first rate hike since July 2023 — and how little it actually hurt crypto. Bitcoin and Ethereum both rallied as traders looked past the 25 basis-point increase and focused on a dovish dot plot, though the move came with a sharp short squeeze underneath it and a cautionary parallel to the start of the 2022 bear market. Alongside the macro story, US regulators quietly removed a chunk of compliance ambiguity for crypto-native brokers, while Crypto.com pushed further into tokenized US equities and Washington sanctioned an Iranian exchange over alleged terror financing.

Market action & drivers

The Fed raised its target rate by 25 basis points to a range of 3.75%–4.00% on Wednesday, the first increase since July 2023. On paper that's a hawkish headline. In practice, crypto and equities both rallied through it, because the accompanying dot plot signaled a median policy rate of 4.1% through the end of both 2026 and 2027 — in other words, just one more quarter-point move on the horizon rather than a sustained tightening cycle. Bitcoin rose about 0.9% to roughly $76,600 and Ethereum gained around 1.1% to trade near $2,440, with Solana up about 2%. The broader risk-on tone showed up everywhere: the Dollar Index slipped 0.17%, Nasdaq 100 futures gained just over 1%, and even gold and silver rose alongside crypto. Notably, crypto followed the equity move rather than leading it — a shift from earlier in the week, when digital assets had been trading independently.

Zoom out, though, and the mood is more fragile than the green candles suggest. Bitcoin remains roughly 40% below its October record of $126,000 — coincidentally, almost the exact same drawdown Bitcoin was sitting at in March 2022, just before the Fed's tightening cycle began back then. That parallel is being drawn deliberately by market commentators: in 2022, Bitcoin rallied 18% in the twelve days after the Fed's first hike before sliding roughly 50% over the following months, a period that also produced the FTX collapse. Nobody is calling for a repeat, but the setup — a relief rally on dovish guidance, layered on top of a market still digesting further tightening risk (futures currently price in another 75 basis points of hikes over the next six months) — is close enough that several desks are flagging the end of this month as the point where the current bounce either holds or fades the way the 2022 one did.

Derivatives & on-chain

The rally caught leveraged short sellers off guard. CoinGlass data showed roughly 86,800 traders liquidated across the crypto market in 24 hours, for a combined $345 million — and shorts absorbed the bulk of it, at $208 million versus $137 million on the long side. Ether led individual liquidations at close to $89 million, ahead of Bitcoin at $85 million. Zcash, which spiked 17% to around $1,358 on the day, saw $56 million in liquidations of its own, a large amount relative to its $23 billion market cap and a sign that leverage had built up fast in a smaller-cap name.

Ethereum's own price action stayed contained: ETH is still boxed inside the same $2,350–$2,600 range that has held since late August, with the daily RSI sitting at a neutral 54. The more interesting on-chain detail is on the supply side — ETH held on exchanges has fallen from more than 21 million coins in the first half of 2025 to roughly 14.6 million now, a steady drawdown that tends to reduce available sell-side liquidity if demand picks up. ETF flows told a more cautious story than the spot price did: Bitcoin funds saw roughly $746 million in net outflows across the two days spanning the Fed decision, and JPMorgan noted that bitcoin ETFs have only recovered about half of their 2026 outflows so far, compared to a full recovery for gold ETFs. Short interest in BlackRock's IBIT is sitting near yearly highs, and the put-to-call ratio on the fund is elevated relative to gold's GLD — in JPMorgan's reading, institutional investors are still positioned defensively on Bitcoin even as the spot price grinds higher, which the bank argues could set up further support for Bitcoin later if that hedging demand unwinds.

Regulation & adoption

Two US regulators moved in the same direction on the same day. The CFTC issued a no-action position extending the kind of protection it had previously granted to wallet provider Phantom to a broader set of software developers connecting users to regulated derivatives markets, provided they meet disclosure and policy requirements. The SEC separately released an "innovation exemption" covering tokenized stock trading on blockchain networks. Digital Chamber CEO Cody Carbone described the CFTC move as removing "a major regulatory ambiguity that's chilled software innovation in derivatives markets." The caveat industry lawyers keep repeating is that no-action letters aren't statute — they can be reversed by a future administration, unlike the comprehensive legislation Congress has so far failed to pass.

That legislative gap was itself back in the news: Bitwise CIO Matt Hougan revised his earlier stance on the stalled Clarity Act, now arguing the broader crypto bull market can continue without it, since regulators appear willing to keep issuing case-by-case relief in its absence. Meanwhile Crypto.com registered with the SEC to offer single-stock futures and confirmed plans for US stock perpetuals, another step in the ongoing blurring of lines between crypto-native exchanges and traditional equity trading. On the enforcement side, the US Treasury sanctioned Iranian crypto exchange BitBank over allegations that it moved bitcoin to Iran's Islamic Revolutionary Guard Corps — a reminder that the same regulatory apparatus loosening rules for domestic developers is simultaneously tightening enforcement against sanctioned actors abroad.

Today's Watch

The Bank of Japan raised its benchmark rate to 1.25% earlier today, a 31-year high, making it the third major central bank move this week after the Fed's hike on Wednesday and the Bank of England's hold at 3.75% on a split 6–3 vote Thursday (UK inflation just hit a five-month high, and the BoE signaled it may hike soon too). With all three of the world's largest central banks now either tightening or preparing to, yen and dollar cross-flows are worth watching for spillover into crypto funding rates. Longer term, keep an eye on the "end of month" window several desks have flagged as the real test of whether this week's relief rally has legs or turns into the start of a deeper drawdown, as it did in 2022.

Sources

CoinDesk — Live updates: Bitcoin edges higher as Nasdaq climbs 1.7% in wake of Fed rate hike

CoinDesk — Bitcoin rises as traders look past the Fed's rate increase: Crypto Markets Today

CoinDesk — Bitcoin's post-Fed price bounce echoes the start of the 2022 bear market: Crypto Daily

CoinDesk — Fed, Bank of England, Bank of Japan interest-rate decisions: Crypto Week Ahead

The Block — JPMorgan says bitcoin could get more support than gold if ETF hedging eases

The Block — Regulators keep moving on crypto: CFTC follows SEC with developer-friendly no-action stance

The Block — Crypto.com registers with SEC for single-stock futures, plans US stock perps

The Block — US sanctions Iranian crypto exchange BitBank over alleged bitcoin transfers to IRGC

The Block — Bitwise CIO Hougan revises Clarity Act outlook, says crypto bull market may continue without legislation

Euronews — Bank of England holds rates at 3.75% in 6-3 split vote as inflation hits five-month high

CNBC — Bank of Japan raises interest rates to 31-year high, flags concerns over inflation