The Federal Reserve’s first interest-rate increase since 2023 briefly sent bitcoin sharply in both directions before the cryptocurrency settled about 1% higher over 24 hours. Bitcoin recently traded near $76,581, up 18% over 30 days. Grayscale’s crypto research team said the decision was a mid-cycle adjustment rather than a broader shift in the interest-rate cycle, and argued that the one or two hikes expected for 2026 would have little effect on capital allocation. Higher rates can reduce demand for assets such as bitcoin by increasing the opportunity cost of holding assets that do not pay interest, while lower rates generally increase liquidity available for risk-taking. Grayscale research chief Zach Pandl said the Federal Reserve’s 2022 tightening campaign probably weighed on bitcoin for that reason, but compared the latest move with 1997, when a one-off hike was followed by continued gains in the Nasdaq. Bitcoin also benefited in August from news that the U.S. Treasury would at least double its liquidity-support buyback operations. The rate decision came as the United States faces an affordability crisis and households contend with inflation and rising oil prices. Federal Reserve Chair Kevin Warsh said inflation remained too high and had persisted too long, while U.S. President Donald Trump again called for substantially lower interest rates, saying they should be 1% or less.