BREAKING: Fed Holds Rates Steady Amid 'Elevated Inflation,' While Bitcoin Remains Resilient

Hey friend,

A busy week in the crypto space and after last weeks dip following the DeepSeek launch a lot of the lost ground has been regained.

Let’s jump into the updates:

The Federal Reserve’s latest decision was as expected: no change to interest rates, keeping them between 4.25% and 4.5%.

Bitcoin’s response? Initially positive, jumping from $101,000 to $104,000 before settling around $105,000. The Fed’s official statement emphasised that inflation remains somewhat elevated and that rate adjustments will be monitored closely.

Fed Chair Jerome Powell’s press conference avoided strong hawkish or dovish tones, sitting right in the middle. While Powell avoided the political debate around Fed independence following Trump’s comments, he did touch on crypto regulation. His stance? Congress should play a greater role in creating a clear regulatory framework.

Despite Trump’s confidence that “interest rates will come down,” the market expects two to three cuts later this year but nothing immediate.

Who’s Selling Bitcoin?

Bitcoin has repeatedly tested the $100,000 level since the start of 2025. Given that the most pro-crypto government in history is now in power, who exactly is selling?

According to Ki Young Ju, CEO of CryptoQuant, the answer is clear: small holders.

On-chain data reveals that those who own less than one whole Bitcoin have been offloading their holdings. Meanwhile, larger investors, those holding one or more Bitcoin are accumulating aggressively.

It’s a familiar pattern: the smaller retail investor gets shaken out, while institutions and whales take full advantage of the opportunity. History always rhymes.

Czech Republic Eyes Bitcoin for National Reserves

There is a story in the Financial Times this morning titled “Head of Czech central bank wants it to buy billions of euros in bitcoin.” While this may come as a surprise to some, it was only a matter of time.

President Donald Trump has been discussing plans to establish a strategic Bitcoin reserve for the United States. El Salvador owns hundreds of millions in Bitcoin and continues to buy at least one per day. Bhutan holds approximately $1.3 billion in Bitcoin, almost 50% of its GDP.

We also know that Russian President Vladimir Putin has discussed using Bitcoin for payments and mining. With all these developments, it is reasonable to assume that other nations are quietly accumulating Bitcoin before making official announcements.

The Czech National Bank (CNB) governor, Aleš Michl, is leading this initiative. His argument is compelling: Bitcoin has zero correlation to bonds and could be a valuable asset for a large portfolio. Rather than a low-level proposal, this is coming directly from the head of the central bank, and the suggested allocation is a significant 5% of reserves.

Michl’s statement:

“Czech National Bank’s goal is price stability. When we took office in July 2022, inflation was 17.5%. We brought it down to target. We are also diversifying reserves—gradually increasing gold holdings from 0% to around 5% and planning for 30% in equities. An asset under consideration is Bitcoin. It currently has zero correlation to bonds and is an interesting asset for a large portfolio. Worth considering. Right now, it’s only at the stage of analysis and discussion. The Bank Board decides, and no decision is imminent.”

Similar to the US working group that is studying the potential of a Bitcoin strategic reserve, the CNB is analysing whether this makes sense. The prediction? Both countries will conclude they need to hold Bitcoin. If nation-states start buying in bulk, 2025 is shaping up to be historic.

Bitcoiners have long predicted that national adoption was inevitable. The time has arrived.

Macro Factors to Watch

Beyond the Fed’s policy stance, macroeconomic conditions continue to influence Bitcoin’s trajectory. Inflation remains a focal point, and while economic activity has expanded at a steady pace, uncertainty lingers over when rate cuts will actually happen. If inflation trends down further, it could create an even stronger tailwind for Bitcoin’s price action.

Meanwhile, Bitcoin’s 60-day cycle remains intact. After hitting an all-time high of $109,358 on January 20, Bitcoin corrected sharply before stabilising around the $100,000 mark. This aligns with historical cycle patterns, suggesting continued volatility before the next leg up.

Big Headlines This Week

• KuCoin’s Legal Settlement: The exchange pleaded guilty to operating an unlicensed money-transmitting business in the U.S. and will pay over $297 million in fines. It has also agreed to exit the U.S. market for at least two years.

• Health Regulators Seize Bitcoin: The UK's Medicines and Healthcare products Regulatory Agency seized £4 million in Bitcoin as part of an ongoing effort to combat illegal online medicine sales.

• Crypto Exchanges Expand in the EU: OKX, Crypto.com, and Bitpanda are securing MiCA licenses, positioning themselves for greater expansion within Europe. Meanwhile, the UK remains behind in regulatory approvals for crypto firms.

Final Thought

Bitcoin’s long-term trajectory remains intact. Smart money is accumulating, nation-states are beginning to recognise its potential, and institutional players are positioning themselves ahead of the next major move. For those with a long-term mindset, history is repeating itself once again.

Stay strong. Stay convicted.

See you next week.

Brendan. Xx