Bitcoin fell alongside most other major cryptocurrencies on Wednesday after the Federal Reserve voted to hold interest rates steady with its most divided policy decision in over 30 years, cooling expectations for near-term cuts.

The Federal Open Market Committee voted 8–4 to keep the federal funds rate in the 3.5% to 3.75% range. Dissenters were split, with Stephan Miran calling for an immediate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan supported "maintaining the target range, but did not support inclusion of an easing bias at this time."

The central bank flagged elevated inflation tied to rising global energy prices and warned that developments in the Middle East are adding "a high level of uncertainty" to its outlook.

Bitcoin (BTC) dropped from roughly $76,200 to briefly below $75,000 before rebounding to $75,440 in the first hour following the decision. Meanwhile, Ethereum (ETH), Solana (SOL), and XRP (XRP) extended losses from earlier in the day, each sinking to two-week lows.

Warsh 'pivot party'

The rate hold was largely priced in, with the CME FedWatch Tool showing near 100% odds of a pause heading into the decision. But analysts pointed to the fractured vote and the statement's tone as the biggest drivers of the market moves.

"The Fed’s decision to keep rates steady wasn't the shocker, but those dissenters calling for a strike on any easing guidance threw a bucket of ice on the market’s pivot party," said Matt Mena, senior crypto research strategist at 21Shares.

The pivot narrative has been building over the past few months around Kevin Warsh, a former Fed governor and current chair nominee who is seen as more open to rate cuts than Jerome Powell.

Warsh has described digital assets as "part of the fabric" of the financial system and disclosed investments across more than a dozen crypto companies and tokens.

Earlier Wednesday, Warsh cleared a key Senate Banking Committee vote, sending his nomination to the full Senate.

Not the main catalyst

Other analysts say that the Fed rate decision is not the main driver of the bitcoin price at this point in time.

"The more important bitcoin catalyst right now is not the FOMC, it is the Clarity Act," said Iggy Ioppe, CIO at Theo, referring to proposed U.S. crypto market structure legislation.

"It makes the market structure around bitcoin more bankable. It formalizes BTC as a digital commodity under CFTC jurisdiction, removes the tail risk of SEC overreach, and gives banks a safe harbor to hold the asset without punitive capital requirements."

The bill is working its way through Congress, but sticking points, including stablecoin provisions and ethics issues, are holding it back from moving forward.

Analysts also flagged upcoming earnings from "Magnificent Seven" equities like Alphabet, Amazon, Meta, and Microsoft as a near-term driver for risk assets like bitcoin.

"Any disappointment on AI monetisation or guidance could amplify or offset whatever tone Powell sets," said Can-Luca Köymen, investment strategist at Sygnum Bank.