The Fed raised rates by 25 basis points, yet the crypto market is partying against the odds—what signals are really being sent?
I. Rate hike lands, but the market rises instead of falling
In September, the Federal Reserve raised the federal funds rate by 25 basis points with a unanimous vote. The target range moved up to 3.75% to 4.00%. This was the first rate hike since July 2023. Of the 18 officials, 16 are expected to raise rates at least once more before year-end, and the timeline for inflation to return to the 2% target has been pushed back to 2029. However, the crypto market didn’t follow the usual script. Within 24 hours after the rate-hike decision was announced, the total global crypto market cap rebounded by about $33 billion. Bitcoin rose 7% to break through $87,000, setting an eight-month high. Ethereum climbed 5%, and XRP surged 8%. Analysts said the market had already fully priced in expectations for the rate hike. When the bearish news actually landed, it triggered a cascade of short liquidations—more than $750 million in shorts were liquidated within 24 hours.
II. Institutional capital pours in aggressively; ETF daily inflows set a record
Alongside the rate hike came a frenzy of institutional inflows. On September 21, U.S. spot Bitcoin ETFs recorded roughly $1 billion in net inflows in a single day, the highest record since October 2025 and the ninth-largest single-day inflow since launch in January 2024. BlackRock’s IBIT led with $381 million, followed closely by ARKB and FBTC. At the same time, Ethereum ETFs also recorded $270 million in net inflows. Bitwise’s Chief Investment Officer publicly claimed that the “crypto winter” is over. Bitcoin’s cumulative gain in September was about 10%, and it may be on track for its best September performance in 14 years. The return of institutional capital not only validates crypto assets’ status as a portfolio allocation category, but also indicates that the bridge between traditional finance and crypto markets is being built faster.
III. Binance invests $100 million in Circle; stablecoin infrastructure upgraded
Against the backdrop of accelerating institutional entry, Binance announced that it will invest $100 million in Circle and renew a five-year cooperation agreement. The significance of this investment lies not only in the amount, but also in the signal it conveys: compliant stablecoins are becoming a core foundational infrastructure for crypto finance. Binance CEO Richard Teng defined this move as building trust through regulation and transparency, adding that USDC is poised to become the infrastructure for the next wave of crypto finance. Meanwhile, the European Central Bank has also officially launched a tokenized-asset settlement platform called “Pontes,” allowing EU banks to settle tokenized-asset transactions using central bank money instead of private stablecoins. This initiative connects distributed ledger technology with the TARGET euro-system infrastructure, reducing reliance on external stablecoins and marking a substantive move by traditional central banks into the tokenization space.
IV. Tokenized U.S. stocks and AI stock themes stay in focus
In the Square community, AI stock discussions remain extremely hot. Related topic tags have been viewed more than 330,000 times, and bullish sentiment clearly dominates. In terms of tokenized U.S. stocks, multiple tokenized stocks—including EEM, MRNA, LIN, and others—are currently traded on BSC and the Ethereum network. Investors can trade tokenized versions of traditional U.S. stock assets around the clock. This trend is blurring the boundary between traditional finance and crypto markets, giving more crypto-native users convenient access to investment opportunities in the U.S. stock market.
V. Outlook for the future
Overall, the market is currently in a window where multiple positive factors overlap. Institutional capital is flowing in at scale through ETFs, stablecoin infrastructure continues to upgrade, and tokenized assets keep expanding—together providing solid support for the crypto market’s medium- to long-term development. That said, investors should note that expectations that the Fed may continue raising rates later this year remain. The timeline for inflation to return to target has been extended, meaning macro-level uncertainty hasn’t been fully eliminated. While watching for short-term rebounds, investors should stay rational and manage position sizing and risk appropriately.
#AIStocksWhatNext #BitcoinBreaksAboveMayHighNears$86K #The Fed rate hike
I. Rate hike lands, but the market rises instead of falling
In September, the Federal Reserve raised the federal funds rate by 25 basis points with a unanimous vote. The target range moved up to 3.75% to 4.00%. This was the first rate hike since July 2023. Of the 18 officials, 16 are expected to raise rates at least once more before year-end, and the timeline for inflation to return to the 2% target has been pushed back to 2029. However, the crypto market didn’t follow the usual script. Within 24 hours after the rate-hike decision was announced, the total global crypto market cap rebounded by about $33 billion. Bitcoin rose 7% to break through $87,000, setting an eight-month high. Ethereum climbed 5%, and XRP surged 8%. Analysts said the market had already fully priced in expectations for the rate hike. When the bearish news actually landed, it triggered a cascade of short liquidations—more than $750 million in shorts were liquidated within 24 hours.
II. Institutional capital pours in aggressively; ETF daily inflows set a record
Alongside the rate hike came a frenzy of institutional inflows. On September 21, U.S. spot Bitcoin ETFs recorded roughly $1 billion in net inflows in a single day, the highest record since October 2025 and the ninth-largest single-day inflow since launch in January 2024. BlackRock’s IBIT led with $381 million, followed closely by ARKB and FBTC. At the same time, Ethereum ETFs also recorded $270 million in net inflows. Bitwise’s Chief Investment Officer publicly claimed that the “crypto winter” is over. Bitcoin’s cumulative gain in September was about 10%, and it may be on track for its best September performance in 14 years. The return of institutional capital not only validates crypto assets’ status as a portfolio allocation category, but also indicates that the bridge between traditional finance and crypto markets is being built faster.
III. Binance invests $100 million in Circle; stablecoin infrastructure upgraded
Against the backdrop of accelerating institutional entry, Binance announced that it will invest $100 million in Circle and renew a five-year cooperation agreement. The significance of this investment lies not only in the amount, but also in the signal it conveys: compliant stablecoins are becoming a core foundational infrastructure for crypto finance. Binance CEO Richard Teng defined this move as building trust through regulation and transparency, adding that USDC is poised to become the infrastructure for the next wave of crypto finance. Meanwhile, the European Central Bank has also officially launched a tokenized-asset settlement platform called “Pontes,” allowing EU banks to settle tokenized-asset transactions using central bank money instead of private stablecoins. This initiative connects distributed ledger technology with the TARGET euro-system infrastructure, reducing reliance on external stablecoins and marking a substantive move by traditional central banks into the tokenization space.
IV. Tokenized U.S. stocks and AI stock themes stay in focus
In the Square community, AI stock discussions remain extremely hot. Related topic tags have been viewed more than 330,000 times, and bullish sentiment clearly dominates. In terms of tokenized U.S. stocks, multiple tokenized stocks—including EEM, MRNA, LIN, and others—are currently traded on BSC and the Ethereum network. Investors can trade tokenized versions of traditional U.S. stock assets around the clock. This trend is blurring the boundary between traditional finance and crypto markets, giving more crypto-native users convenient access to investment opportunities in the U.S. stock market.
V. Outlook for the future
Overall, the market is currently in a window where multiple positive factors overlap. Institutional capital is flowing in at scale through ETFs, stablecoin infrastructure continues to upgrade, and tokenized assets keep expanding—together providing solid support for the crypto market’s medium- to long-term development. That said, investors should note that expectations that the Fed may continue raising rates later this year remain. The timeline for inflation to return to target has been extended, meaning macro-level uncertainty hasn’t been fully eliminated. While watching for short-term rebounds, investors should stay rational and manage position sizing and risk appropriately.
#AIStocksWhatNext #BitcoinBreaksAboveMayHighNears$86K #The Fed rate hike