Cryptocurrency prices declined Wednesday after the Federal Reserve's policy announcement and news conference with Fed Chief Jerome Powell. The price of bitcoin slid in afternoon trading.
The White House also released a digital asset report this afternoon, which outlined the administration's recommendations for a crypto regulatory framework.
Fed Meeting
The Federal Open Market Committee wrapped up its two-day meeting and updated its interest rate strategy.
The Fed held its key policy rate unchanged, with a target range of 4.25% to 4.5%. Two voting members registered dissents, the most since 1993, according to Deutsche Bank economists.
Odds for a rate cut at the Sept. 17 Fed meeting declined to 47% from 63% a day earlier, according to CME FedWatch, following the Fed conference, this morning's GDP news and better-than-expected private-sector job growth.
"Bitcoin is a hedge against monetary debasement," said Matthew Sigel, head of digital assets research at VanEck. "If the Fed signals easier policy ahead, crypto markets will likely interpret that as a green light."
Lower interest rates also reduce borrowing costs, which can lead to investments in alternative or innovative assets such as bitcoin.
Bitcoin has generally climbed following the four prior FOMC meetings this year.
During the Jan. 28-29 meeting, bitcoin rose above $104,200, from around $101,200 prior to the Fed rate news, according to CoinDesk indexes data. Bitcoin for the March 18-19 meeting rose to $85,465 from $82,230.
During the May 6-7 Fed meeting, bitcoin surged to $96,200 from $94,960, then cleared $101,300 on May 8.
Bitcoin eased to $103,821 from $104,719 for the June 17-18 meeting. The price of bitcoin dipped below $99,000 on June 22, but recovered to above $105,000 by June 24.
White House Digital Asset Report
Meanwhile, the White House released a report outlining its framework for digital assets, titled "Strengthening American Leadership in Digital Financial Technology." The Working Group on Digital Asset Markets compiled the report as part of President Donald Trump's executive order from January.
"Over the next 24 to 48 hours, all eyes will be on the Fed and the White House crypto policy report due imminently," said Joel Kruger, market strategist at LMAX Group. Kruger believes that any dovish tone from the Fed or an indication of strategic bitcoin reserve purchases from the White House "could quickly reverse recent softness."
The Working Group in the report said it "endorses the notion that digital assets and blockchain technologies can revolutionize not just America's financial system, but systems of ownership and governance economywide."
Digital Asset Recommendations
Many topics from the 166-page document cover legislative priorities that are already in motion via the Genius stablecoin act, which President Trump signed into law, and the Clarity Act, which provides a digital asset framework.
The recommendations call for the Securities and Exchange Commission and the Commodity Futures Trading Commission to "immediately enable the trading of digital assets at the federal level," by providing clarity to market participants on issues such as registration, custody, trading and record-keeping.
The report opens the door to greater DeFi (decentralized finance) technology integration by allowing the use of tools like safe harbors and regulatory sandboxes. Regulatory sandboxes are controlled testing grounds for businesses to experiment with new products and services.
The working group also urged agencies to implement the Genius Act quickly, which the Trump administration believes will "promote and protect the sovereignty of the U.S. dollar." The report also discourages and recommends prohibiting any central bank digital currency in the U.S., in support of the Anti-CBDC Act that was passed by the House earlier this month.
The report also discusses the bitcoin reserve and U.S. digital asset stockpile. The working group noted the reserve and stockpile will be administered by the Treasury. It will consist of forfeited digital assets seized by the U.S. government.
The group recommends that bitcoin in the reserve will not be sold but maintained as reserve assets for the U.S. The report noted that the Treasury and Commerce Department will "develop strategies that could be used to acquire additional bitcoin for the reserve in ways that are budget neutral and do not impose incremental costs on United States taxpayers."
Bitcoin Price, Crypto Stock Action
Bitcoin traded around $117,100 Wednesday afternoon, reversing from around $118,650 in the morning. The price of bitcoin on July 14 hit a record $123,091 to clear its previous May 22 high of $111,970. But bitcoin has been stuck between $115,000 and $120,000 in the weeks since.
"From a technical perspective, bitcoin remains confined to a consolidation off record highs," Kruger said, "while ethereum's ETF-led flows continue to underscore relative strength in ETH."
Ethereum ticked higher to trade around $3,770. Ethereum has rallied more than 50% over the past month and is trading around 2025 highs.
The iShares Bitcoin Trust ETF and other spot bitcoin ETFs declined 0.5% Wednesday. Shares of the group are trading near the top of buy zones for flat bases after early-July breakouts.
Coinbase stock swung 1.6% higher Wednesday ahead of its earnings report due Thursday.
Strategy pared its Wednesday advance to just a fraction. The company formerly called MicroStrategy on Tuesday acquired 21,021 bitcoin for about $2.46 billion, which comes out to $117,256 per bitcoin. As of Tuesday, Strategy holds 628,791 bitcoin acquired for $46.08 billion at an average price of $73,277 per bitcoin.
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