Grayscale sees limited crypto impact from another 2026 Fed hike
A further Federal Reserve rate increase would likely be a mid-cycle adjustment, though higher rates could affect crypto sectors unevenly.
Another Federal Reserve rate increase in 2026 would be unlikely to materially change cryptocurrency capital allocation, according to Grayscale research chief Zach Pandl.
Pandl characterised the reported quarter-point increase, which lifted the Fed’s target range to 3.75%-4.00%, as a mid-cycle adjustment rather than a return to the tightening cycle that began in March 2022. That cycle delivered 550 basis points of increases through July 2023 and raised the opportunity cost of holding non-interest-bearing assets such as Bitcoin.
Bitcoin rose after the latest rate decision rather than selling off. Pandl also pointed to a one-off Fed increase in 1997, after which the Nasdaq’s bull market continued, as a precedent for a rate move that did not disrupt broader market momentum.
Grayscale’s view does not imply a uniform response across crypto assets. Higher cash rates could increase revenue for stablecoin issuers, while higher yields on tokenised bonds and money-market funds could attract capital onchain.
Market-implied estimates point to a further increase by year-end. CME FedWatch data reportedly showed a 54.2% probability of a hike at the 28 October meeting and an 88.2% probability that the target range would be higher by 9 December. Projections also showed 16 of 18 policymakers expecting at least one further increase in 2026.
