Grayscale Rules Out Major Crypto Shifts From a Second 2026 Hike

Grayscale Research head Zach Pandl wrote that the Federal Reserve’s recent quarter‑point rate increase to a target range of 3.75%‑4.00% is unlikely to cause major shifts in crypto markets, and he does not expect a second hike this year to have a similar impact.

Recent Fed Action Compared to Past Cycles

Pandl contrasts the current move with the aggressive tightening cycle that began in March 2022, during which the Fed raised rates by 550 basis points by July 2023. That earlier cycle increased the opportunity cost of holding non‑interest‑bearing assets such as Bitcoin (BTC). He argues that the modest quarter‑point adjustment is a mid‑cycle tweak rather than a structural change.

Historical Reference Point

The analyst cites the March 1997 Fed hike under Alan Greenspan as a comparable mid‑cycle adjustment, noting that the Nasdaq continued its bull market afterward. Pandl states, “We believe yesterday’s move was a mid‑cycle adjustment, not a cyclical change. And we doubt the one or two rate hikes expected for 2026 will lead to much change in capital allocation.”

Uneven Impact Across Crypto Assets

While overall crypto markets may remain stable, Pandl highlights that higher cash rates can benefit certain segments. Stablecoin issuers such as Circle and Tether could see increased revenue, and tokenized bonds and money‑market funds may attract more capital on‑chain.

Market Expectations for Future Hikes

According to CME FedWatch data, traders assign a 54.2% probability to another rate increase at the October 28 meeting and an 88.2% probability that rates will be higher by the December 9 meeting. About 40.3% of respondents expect the target range to reach 4.25%‑4.50%.

Fed Projections Through 2028

Federal officials project one more hike this year, followed by a cut by the end of 2028. Projected rates are 4.1% for 2026 (up from 3.8% in June), 4.1% for 2027 (up from 3.6%), and 3.9% for 2028 (up from 3.4%).