In Part 1, we looked at how the Fed determines interest rates, and in Part 2, we saw the correlation proven by real data. In October 2025, Bitcoin reached an all-time high ($126k), but as of November, it is still in a correction ($87k). Investors' eyes are now on The last FOMC in December 2025 and the direction for 2026in the coming weeks. In this final part of the series, we'll discuss the Fed's future interest rate scenarios, what they mean for the price of Bitcoin, and provide practical investment strategies.
December 2025 to 2026 Fed Rate Scenario
Currently, the Fed funds rate is between 3.75 and 4.001 TP3T. The market is betting that as inflation approaches the 21 TP3T target, the Fed will raise the ‘Neutral Rate’ We expect to see further rate reductions to the level of 3.01 TP3T to 3.51 TP3T.
1Scenario A: Soft landing and continued cuts
This is the most ideal scenario, where the economy doesn't stagnate and inflation only slows. This is the path the market currently sees as most likely.
Scenario A outlook (Probability 60%)
- December FOMC: 0.25%p additional reduction (3.50 to 3.75%)
- First half of 2026: Gradual reduction by 0.251 TP3 Tp per quarter
- Final rate: Stable at levels 3.00% to 3.25%
- Bitcoin impact: with continued liquidity supply Attempting to retrace all-time highs ($130k~)
2Scenario B: Inflation rebounds and rates remain unchanged
If geopolitical events or higher oil prices cause prices to rise again, the Fed could stop cutting rates. This could be a short-term headwind for Bitcoin.
Scenario B outlook (Probability 30%)
- December FOMC: Rate freeze (3.75 to 4.001 TP3T to be maintained)
- Powell Remarks: “Hawkish” Switching to Tone
- Outlook to 2026: Higher for Longer (Season 2)
- Bitcoin impact: Disappointed Sales Exit $70k to $80k consolidation
Experts' Bitcoin Price Prediction for 2026
Following the approval of a Bitcoin spot ETF, major Wall Street financial institutions are recognizing Bitcoin as ‘digital gold" and predicting long-term gains. Let's weigh the optimism against the cautious.
🔥 Optimism (Bull Case)
Standard Chartered, VanEck, Matrixport
- Key arguments: Rate cut + halving effect + institutional money inflows
- By the end of 2025, the goal is: $150,000
- 2026 Target Price: $200,000 reached
- Key variables: Pro-Virtual Asset Policy After the US Election
🤔 Prudence (Bear Case)
Some analysts at JPMorgan and Goldman Sachs
- Key arguments: Recession fears + Regulatory uncertainty
- By the end of 2025, the goal is: $90,000 (maintained at current level)
- Risk factors: Mountgox Volume and other overhang issues
- View: Upside Limited, Volatility Increasing
| Organization name | Estimated value at the end of 2025 | Key Rationale |
|---|---|---|
| Standard Chartered | $150,000 | Accelerate ETF inflows |
| Bernstein | $150,000 | Growing the mining industry |
| JP Morgan | $90,000 | Burdened by rising mining costs |
Rate cuts, practical investment response strategies
While the Fed's rate-cutting bias is clear, markets don't move in a straight line, and November's correction ($126k → $87k) proves it. We propose a three-pronged response strategy for smart investors.
3Enhance your split buy (DCA) strategy
💡 Strategy: Corrections like the current one are an opportunity for long-term investors. With interest rates in the 3% range, liquidity will eventually flow into asset markets, rather than trying to predict prices, Buy a certain amount on a set date each week/monthThe DCA strategy has the best odds in volatile markets.
4Managing risk around the FOMC timeline
The period before and after the FOMC meeting is the most volatile, especially for the March, June, September, and December meetings where the scorecard is presentedrequires more attention.
FOMC Weekly Trading Guide
- 3 days before announcementReduce position size and increase cash allocation
- Immediately after the announcement: Don't rush in (watch out for whipsaw/cheat moves)
- After the press conference: Enter on direction after interpretation of Powell's remarks
- LeverageAvoid High Leverage During Rate Decision Week
🎯 Series Final Conclusion
✅ ✅ Part 1: The Fed rate is a key factor in determining the gravitational pull of asset markets.
✅ ✅ Part 2Interest rates and Bitcoin are historically and statistically inversely correlated.
✅ ✅ Part 3: The second half of 2025-2026 is expected to be a long term upward move for Bitcoin with a cycle of rate cuts.
Rather than chasing short-term ups and downs, Macroeconomic trends (interest rate cuts)and take a deep breath before entering the market.
This article is based on the For objective informational and educational purposesof the Federal Reserve Bank of New York. It provides information about Fed interest rate policy and market outlook and is not a recommendation to buy or sell any cryptocurrency.
Cryptocurrency is a High volatility and investment riskin the investment. Historical data or expert forecasts are no guarantee of future returns, and all investment decisions are based on the Personal judgment and responsibility and should be done carefully.
Before investing, make sure you have Advice from a financial professionalto get the.
