What is the Federal Reserve? It's the US central bank managing monetary policy by setting interest rates, regulating banks, and controlling money supply. Created by the 1913 Federal Reserve Act, it operates through 12 regional banks and a Board of Governors led by Chair Jerome Powell, with the federal funds rate at 3.50%-3.75% and next meeting January 27-28, 2026.

After the Federal Reserve's third interest rate cut of the year, Bitcoin rebounded from the low of below $90,000 to $93,500. On-chain analytics firm Santiment pointed out that this follows the classic "buy the rumor, sell the news" pattern. Analysts said that the rate cut, which was anticipated, has been digested by the market, and the $40 billion short-term Treasury bond purchase plan is interpreted as a slightly bullish signal.

Federal Reserve Chair Jerome Powell pushed for a 25 basis point rate cut on December 10, but a series of details revealed the severity of the central bank's division. Only two officials officially voted against the decision, but quarterly interest rate forecasts showed that six policymakers believe rates should remain in the 3.75% to 4% range before the cut, constituting a "silent dissent." Even more surprisingly, only 4 out of the 12 regional Fed banks requested a rate reduction, implying that perhaps 8 presidents opposed the cut.

The reason for Bitcoin's rise today comes from favorable policies. The U.S. Congress has sent a letter to the SEC urging the enforcement of allowing cryptocurrencies to be included in 401(k) retirement accounts, with a moderate 1-3% allocation generating a buying pressure of $125 billion to $375 billion. The Federal Reserve also announced that starting December 12, it will purchase $40 billion worth of short-term government bonds. Driven by these dual catalysts, Bitcoin's target price is aimed at $131,000.

After the Federal Reserve's 25 basis point rate cut in December, the market's expected "hawkish stance" did not materialize. Powell downgraded inflation prospects and announced the purchase of $40 billion in short-term government bonds starting this month. However, "Big Short" Michael Burry warned that if Trump intends to strengthen control over the Federal Reserve, this central bank "might face an end," and an independence crisis could trigger a collapse in dollar credit and chaos in asset markets.

President Trump harshly criticized the Federal Reserve's latest rate cut decision during a roundtable with business executives at the White House, stating that the 25 basis points cut was too small and should be "at least doubled" to 50 basis points. Trump directly criticized Federal Reserve Chairman Jerome Powell, calling him "a rigid person," and said the size of the rate cut was too small and too slow. He also revealed plans to interview Federal Reserve Board member Waller that evening, who, along with National Economic Council Director Hasset, is a leading candidate to succeed Jerome Powell.

Bitcoin (BTC) surged briefly before pulling back, currently trading around $91,220 as of December 11. The Federal Reserve announced a 25 basis point cut to the benchmark interest rate, with Chair Powell stating that "rate hikes are not anyone's basic expectation." Starting from December 12, a 30-day period of purchasing $40 billion in government bonds ignited bullish sentiment. Japan is preparing to move crypto asset regulation out of the country's payment system and into a framework specifically designed for investment and securities markets.

The Federal Reserve cut interest rates by 25 basis points to 3.5-3.75%, but the decision was passed with a 9-3 vote, the highest opposition record since 2019. The market reaction was unexpectedly strong, with the Dow Jones soaring 497 points, up 1.1%, and Bitcoin briefly surged to $94,000. Fed Chairman Powell stated, "Rate hikes are not part of anyone's basic expectations," and announced the purchase of $40 billion in government bonds within 30 days starting December 12, igniting bullish market sentiment.

After the Federal Reserve cut interest rates by 25 basis points to 3.5% to 3.75%, global financial markets instantly surged. The Dow Jones Industrial Average soared over 600 points, spot gold jumped from lows to $4,238.78, and Bitcoin briefly surged above $94,000. Federal Reserve Chairman Powell explicitly ruled out the possibility of a rate hike, stating "a rate hike is not anyone's baseline expectation," and announced the purchase of $40 billion in government bonds within 30 days starting December 12.

Kevin Hassett, director of the National Economic Council, said at the Wall Street Journal CEO Council event that there is "ample room" for rate cuts in the coming months, and that the rate cut could exceed the current expectation of 0.25%, a position consistent with President Trump's call to reduce borrowing costs. Hassett is seen as a popular successor to current Fed Chairman Powell, who will serve until May next year. Trump criticized Powell for showing reluctance to cut interest rates and hinted at a desire to fire him during his second term.

Bitcoin surged to $94,625 on December 10, a three-week high, with Santiment data showing a surge in calls for "higher" and "beyond" on social media, and FOMO sentiment has clearly returned. However, the Fed's interest rate decision has become the biggest variable, with the market expecting an 88.6% chance of a 25 basis point rate cut but only a 21.6% chance of another rate cut in January, and any hesitation about future rate cuts could be bearish.

Bitcoin has surged back above $94,000, climbing over 4% in the past 24 hours to reach highs near $94,640 amid renewed risk appetite in crypto markets.

Nick Timiraos, a Wall Street Journal reporter known as the "Fed mouthpiece," revealed that as many as 5 out of the 12 voting members of the Federal Reserve have publicly expressed reservations about cutting interest rates, and 10 out of the 19 total members believe there is no sufficient reason for easing. The market expects Fed Chair Powell to repeat the strategy from 2019: first lowering the interest rate to the 3.50%-3.75% range, and then adding stricter policy thresholds in the statement.

Bitcoin rose to $92,526 on December 10, with a daily increase of 1.92%. The core reason for Bitcoin's rise today is that Trump will interview candidates for Federal Reserve Chair this week. The leading candidate, Hassett, is seen as extremely dovish and may push rates further down from the current 3.5% to 3.75% to Trump's requested 1%. The market expects the Federal Reserve to cut rates by 25 bps on Wednesday, marking the third consecutive rate cut.

The Federal Reserve's overnight reverse repo operations reached $13.5 billion, which is a significant anomaly for professional traders tracking dollar liquidity. This sudden surge indicates a sharp increase in demand for short-term dollars within the banking system, possibly signaling tightening in the funding markets or shaken confidence among institutions. As a liquidity-sensitive asset, Bitcoin was the first to react to this change over the weekend, experiencing price volatility. Bitcoin is no longer independent from the US dollar system; instead, it is deeply embedded within the global liquidity cycle.

Whether Bitcoin can reach $100,000 before New Year's Eve depends on investors' reactions to the Federal Reserve's policy shift, as well as the market's response to the soaring debt of major tech and AI companies. The Fed officially ended its quantitative tightening policy on December 1, and this week’s rate cut is all but certain. U.S. money market funds have reached a record $8 trillion in size, and rising tech credit risk could drive capital flows into scarce assets like Bitcoin.

The price of Bitcoin dropped by $2,000 before Sunday’s close, falling to nearly $87,000 at one point, but rebounded to around $90,000 on December 8. Cryptocurrency analyst Michaël van de Poppe predicts that FOMC-related jitters may trigger a pullback, after which Bitcoin will quickly rebound and move toward $100,000 within the next 1 to 2 weeks.