Fed Holds Rates Steady, Risk Assets Get A Breather

(MENAFN- Investor Ideas) newswire) a trusted go-to platform for big investing ideas, including crypto stocks issues commentary from Bitfire Group Holdings Limited (01611).

Following the July FOMC meeting where the Fed held rates steady amid a hawkish dissent and energy price uncertainties, risk assets have found a brief breather while Bitfire OTC recorded a record-shaping 257% surge in July volume as institutional inflows accelerate. Here's Bitfire Research's latest market insight:

The Federal Reserve voted 9-3 to hold its benchmark rate at 3.50%-3.75% at the July 29 FOMC meeting, with Chair Kevin Warsh reaffirming the 2% inflation target as non-negotiable and noting that AI-related high-tech investment is a key pillar supporting the economy's steady expansion.

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The three dissenting votes - all calling for a 25-basis-point hike - marked the first time since 2016 that three Fed officials have broken ranks in the same direction. Markets interpreted the outcome as "hawkish wait-and-see," signaling that while a rate hike hasn't landed in the near term, the tightening bias remains intact.

CME FedWatch data showed the probability of a September rate hike falling from nearly 80% to about 65% after the meeting, giving risk assets a brief window of relief. Bitcoin and other major cryptocurrencies recovered some ground, with market sentiment shifting from cautious ahead of the meeting to moderately warmer afterward.

Energy prices remain the biggest wild card, according to Bitfire Research. The ongoing Iran conflict and disruptions to shipping through the Strait of Hormuz are keeping upward pressure on oil prices. If the conflict continues, inflation pressures could feed back into the rate narrative - a key risk for the second half of the year.

On-the-ground trading data shows institutional capital flowing back at an accelerating pace. Bitfire Group (01611) reported that its over-the-counter trading desk hit a new all-time high in July volume, up 257% from June. On a weekly basis, every week in July showed significant growth over the same week in June. The week surrounding the FOMC meeting saw volume rise about 79% compared with the same June week, suggesting large capital pools are rotating back into on-chain real-economy trading after absorbing the macro uncertainty.

Looking ahead, energy price trends and the Fed's policy path remain the key variables to watch. The recent launch of Robinhood Chain has quickly attracted substantial on-chain trading and tokenized asset activity, with TVL reaching about $325 million and daily DEX volume averaging about $553 million - showing that real demand hasn't disappeared despite macro headwinds.

Over the longer term, the industry will continue to rely on scarcity and network effects to attract capital, and investors should focus on real-economy demand and institutional allocation progress. Combined with the post-FOMC improvement in market sentiment and the continued growth of institutional capital allocation to mainstream assets, Bitfire Research maintains its view that the market is in a "high-value zone" and remains cautiously optimistic about the outlook.

About Bitfire Group

Bitfire Group Holdings Limited (01611) is a leading digital asset financial services platform in Asia, committed to building the Asia-Pacific's first private-banking-grade digital asset steward. Holding SFC Type 1, 4 and 9 Licences issued by the Securities and Futures Commission of Hong Kong, the Group delivers compliant, secure and efficient one-stop digital asset services for institutional clients and high-net-worth individuals.

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