Grayscale links Bitcoin outlook to Fed rates

• Grayscale said Bitcoin could narrow its performance gap with equities if the Federal Reserve keeps interest rates unchanged.
• Since late February, equities have gained 9%, while Bitcoin fell 1% and gold declined 20% as rate expectations increased.
• The asset manager said Bitcoin combines characteristics of a monetary asset and a technology-linked growth asset.

Grayscale Investments said Bitcoin (CRYPTO:BTC) could improve relative to equities if the Federal Reserve refrains from raising interest rates, citing a growing link between cryptocurrency performance and monetary policy expectations.

The view comes as rising expectations for tighter monetary policy have coincided with a divergence in returns across major asset classes since late February.

“Our base case is for the Fed to hold off on rate hikes. If we’re right, bitcoin’s price may catch up with stocks,” said Grayscale Head of Research Zach Pandl.

Grayscale said U.S. equities have gained 9% since late February, while Bitcoin has declined 1% and gold has fallen 20%, a period during which one-year Federal Reserve rate expectations increased by approximately 60 basis points.

The Federal Open Market Committee voted unanimously on June 17 to keep interest rates between 3.5% and 3.75%, while Following the meeting the next Federal Reserve policy decision was scheduled for July 28–29.

Grayscale argued that higher interest rates increase the appeal of cash and fixed-income investments, raising the opportunity cost of holding non-yielding assets such as Bitcoin and gold.

The firm also described Bitcoin as a scarce digital commodity that can function as a store of value while providing exposure to blockchain network growth, positioning it differently from both traditional growth stocks and precious metals.

At the time of reporting, Bitcoin price was $64,107.51.