The Fed raised rates a quarter point Wednesday, and bitcoin held up remarkably well. Stocks weakened that afternoon, rebounded Thursday, and bitcoin largely consolidated before climbing above $80,000 in Friday reporting, up roughly 5.6% over 24 hours. I see that resilience as consistent with structural demand. It certainly does not prove bitcoin has permanently disconnected from other markets, but watching it respond differently to both positive and negative moves in equities is interesting.
There is a familiar argument in bitcoin circles: “They can’t afford to raise rates,” or “They can’t raise rates without breaking something.” That treats interest rates and liquidity as though they were the same lever. They are separate tools. The Fed can make borrowing more expensive while also providing collateralized loans or reserves to institutions experiencing funding stress. Higher rates and liquidity support can coexist.
We have already seen it happen. In March 2023, the Fed introduced emergency bank funding after bank failures and then raised rates again. The emergency lending supported bank liquidity while the higher policy rate continued to restrain demand.
My bet is that when tighter policy creates enough financial stress, the liquidity support gets bigger. One way or another, they’re going to print so much fucking money.