Coinbase, Strategy, Bitcoin All Fall — Here’s What the Fed Just Said

TLDR

• Fed minutes from January revealed some policymakers discussed possible rate hikes if inflation stays high
• Rates were held at 3.5%–3.75% at the January meeting after three cuts in late 2025
• Bitcoin dropped to $66,000 following the hawkish Fed minutes release
• Coinbase fell 2% and Strategy dropped 3% as crypto stocks reversed early gains
• The US dollar strengthened, adding pressure on risk assets including crypto

Bitcoin dropped to $66,000 on Wednesday after the Federal Reserve released minutes from its January meeting, showing some policymakers had discussed the possibility of raising interest rates again.

The minutes from the Federal Open Market Committee’s January meeting were published on Wednesday. They showed that several members raised the idea of hiking rates if inflation does not come down.

The Fed held rates steady at 3.5% to 3.75% at that meeting. That came after three consecutive cuts in late 2025 that brought rates down from 4.5%.

Some members said it would be appropriate to hold rates steady for longer to watch the economic data. Others went further, saying more cuts may not be needed unless disinflation gets clearly back on track.

Most participants warned that progress toward the Fed’s 2% inflation target could be “slower and more uneven than generally expected.” US inflation as measured by the Consumer Price Index currently sits at 2.4%.

If inflation does fall in line with projections, the minutes said rate cuts would likely be appropriate. But the hawkish tone of the minutes still rattled markets.

Bitcoin Drops as Dollar Strengthens

Bitcoin had been trading around $68,500 overnight before the minutes were released. By Wednesday afternoon it had slid to under $66,000, a drop of around 2.5% in 24 hours.

The US dollar index climbed to its strongest level in nearly two weeks following the minutes release. A stronger dollar typically puts pressure on risk assets like crypto.

Bitcoin is now heading for its fifth straight week of losses. That would be its worst losing streak since the 2022 bear market.

The $66,000 level is being watched closely by traders. It held as support last week and helped push BTC back above $70,000 at that time.

Crypto Stocks Also Hit

Crypto-related stocks reversed earlier gains after the minutes dropped. Coinbase had been up 3% in the morning but swung to a 2% loss by the afternoon.

Strategy, the largest corporate holder of Bitcoin, fell about 3% as the price of Bitcoin weakened.

US stocks broadly also gave back much of their earlier gains before the close of trading.

CME futures markets currently show a 94% probability that the Fed will keep rates unchanged at its next meeting on March 18.

Higher interest rates are generally seen as negative for crypto. They make borrowing more expensive and reduce the appeal of riskier assets compared to bonds or cash.

If the $66,000 support level breaks, traders say the next area of focus would be the early February lows near $60,000.

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