Key Highlights
- Polymarket suggest 87% odds of no Fed rate cut in January, matching the CME FedWatch Tool’s odds
- As Bitcoin has been stuck between major consolidation zones, these odds could disappoint the crypto community
- In January, the Digital Asset Market Clarity Act is also expected to enter Senate markup, which could bring regulatory clarity for the crypto market
As the new year approaches quickly, the financial world is placing its eye on the upcoming Fed rate cut meeting. The prediction market platform Polymarket is sending a strong message about the Federal Reserve’s meeting.
JUST IN: There is now an 87% chance the Fed does NOT cut rates in January, according to Polymarket 👀 🇺🇸 pic.twitter.com/73gR2Ue90x
— Bitcoin Magazine (@BitcoinMagazine) December 30, 2025
The current odds largely favor the U.S. central bank keeping interest rates steady at its first policy meeting of 2026. The probability of no change to the federal funds rate at the January 27-28 meeting of the Federal Open Market Committee (FOMC) stands at 87% on Polymarket.
On the flip side, the chances of a smaller, 0.25% cut are just 13%, with almost no chase assigned to a larger cut or an increase.
This data on Polymarket also matches the traditional CME FedWatch Tool, which also shows an 84% to 87% odds of a pause.
This expectation for a pause comes after the Fed’s previous meeting in December. In that meeting, Fed officials did cut rates by 0.25%, which brings the target range to 3.50 to 3.75%. However, the official minutes from that meeting revealed major internal disagreements.
The debate was mentioned as “finely balanced,” with some officials who voted for the cut noting that they could have supported holding rates steady instead.
How Fed Reserve Policy Influences Cryptocurrency Prices
The decision on interest rates is a major factor that influences the price of speculative assets like Bitcoin and other cryptocurrencies. Generally, when the Fed cuts rates, it creates an easy money environment.
Low interest rates force investors to seek higher returns, which often provides benefits to crypto markets. The rate-cutting cycle that began in 2024 was a major factor helping propel Bitcoin from below $30,000 to a peak over $126,000 in 2025.
On the other hand, when the Fed pauses or holds rates higher for longer, the financial world gets tighter. This can make the USD stronger, making safe assets like government bonds more attractive.
With an 87% chance of no rate cut in January, this expectation may be limiting Bitcoin’s near-term momentum. At the time of writing, Bitcoin is trading at around $88,000. It has been stuck between $85,000 and $90,000 for weeks as it is struggling to break this consolidation zone due to low holiday trading.
Major Regulatory Development in January
While monetary policy has a short-term impact, the cryptocurrency sector is watching another major development in January, which is regulatory clarity. According to David Sacks, Trump’s Crypto Czar, the Digital Asset Market Clarity Act is expected to enter Senate markup in January.
“We had a great call today with Chairmen @SenatorTimScott and @JohnBoozman who confirmed that a markup for Clarity is coming in January. Thanks to their leadership, as well as @RepFrenchHill and @CongressmanGT in the House, we are closer than ever to passing the landmark crypto market structure legislation that President Trump has called for,” Sacks posted on X. “We look forward to finishing the job in January!”
This major legislation, called the Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, passed the U.S. House of Representatives with strong bipartisan support in July. The bill is expected to divide clear regulatory oversight between the Commodity Futures Trading Commission (CFTC) for digital commodities and the Securities and Exchange Commission (SEC) for digital securities.
Some experts believe that there is a 50-60% chance the bill could pass in the first half of 2026.
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