“The "rate cut trade" hasn't arrived yet, but the "no rate hike trade" has already come.
On September 16, the Federal Reserve announced a 25 basis point rate hike — the first in three years.
According to textbook logic, rate hikes are bearish for risk assets. Bitcoin should have dropped.
But the fact is: on the day of the rate hike, BTC actually rose, then surged from $58,000 to $86,000.
Rates went up, yet Bitcoin rose 13%.
This doesn't mean the market is crazy. It means the market is trading a completely different narrative.
And 99% of people still haven't figured out what this narrative is called.
A concept everyone confuses
Posts on the market only repeat two phrases: "rate cut expectations are heating up," "liquidity is coming."
But heating up rate cut expectations and cooling down rate hike expectations are two different things.
What is the "rate cut trade"?
Easing cycle starts → rates go down → liquidity is released → risk assets benefit across the board. This was the driving logic of the 2020-2021 bull market — the Fed pushed rates to zero, money was so abundant it had nowhere to go, and Bitcoin rose from $4,000 to $69,000.
What is the "no rate hike trade"?
Tightening cycle pauses → but rates remain around 4% → liquidity is not released → it’s just "no longer tightening."
One is loosening the faucet. The other is just turning the faucet a bit less tight, not opening it.
The "good news" you feel is essentially just "not getting worse."
What exactly is the market trading?
First, look at what the Fed did:
The September FOMC unanimously approved 12:0 to raise the benchmark rate from 3.50%-3.75% to 3.75%-4.00%. The dot plot shows one more 25bp hike this year, with a terminal rate forecast of 4.1% in 2026.
Then look at how the market priced the latest data:
After the October PCE data release, CME FedWatch shows a 62% probability of holding rates steady in October, and a 37% probability of a 25bp hike.
Note — the higher probability is "holding steady," not "rate cut."
What about December? The cumulative probability of a 25bp hike is about 39%, and a 50bp hike is as high as 38.2%. The market has basically accepted at least one more hike before year-end.
Now look at Bitcoin’s price action for confirmation:
After August’s PCE came in below expectations, BTC hit $85,598 intraday, then quickly fell back to around $83,600.
It rose, but couldn’t sustain the momentum.
Why? Because the 10-year US Treasury yield briefly rose to 5.25% in September, the highest since 2002.
You’re holding a non-yielding asset, while the risk-free rate next door is 5.25%. Tell me why capital would massively flow back?
Grayscale research head Zach Pandl issued a report after the rate hike, with a core view:
"We suspect the one to two hikes priced in for 2026 won’t significantly change capital allocation."
He also cited a very precise historical analogy: in March 1997, Greenspan only made a single rate hike, yet the Nasdaq bull market continued strongly.
Grayscale characterizes this round of hikes as a "mid-cycle adjustment," not a cyclical turning point.
In plain terms: this isn’t the violent 550 basis point tightening of 2022. It’s more like "tapping the brakes and continuing to drive" in 1997.
But the problem is — "won’t crash hard" and "will rally hard" are two different things.
Who is the market rewarding?
BTC rose 48% from the summer low of $58,000 to the September high of $86,000.
But what drove this rally? Not liquidity. It was short squeeze + passive ETF buying + sentiment repair that "the worst is over."
After BTC surged to $87,354 on September 21, ETF inflows clearly weakened, slowing from the previous weekly inflow of $2.4 billion.
No incremental liquidity, just sentiment repair — the rally will stall at some point.
Myriad’s market data is also honest: BTC’s probability of breaking the previous high of $126,199 before 2027 is only 7%, while the short-term probability of staying above $84,000 is 49%.
The market is voting with real money: it’s not that they don’t believe in Bitcoin, but they don’t believe there’s enough fuel now for a breakout.
So how should we understand the "no rate hike trade"?
A simple framework:
Rate cut trade = floor the gas pedal, car speeds forward.
No rate hike trade = release the gas pedal, car coasts on inertia.
When coasting, the car won’t stop immediately. But do you expect it to accelerate to 120 mph? Impossible.
Specifically for crypto markets:
Good news: short-term selling pressure eases. You don’t have to worry about the Fed suddenly hiking 50 basis points and crashing the market. The bottom support is much firmer than in the first half of the year.
Bad news: rates remain near 4%, so the opportunity cost of holding non-yielding assets is still high. Grayscale’s "won’t significantly change capital allocation" translates to — big money won’t rush in for this reason.
Grayscale is right. The "no rate hike trade" provides bottom support, not an engine for rally.
Some say: "No rate hike is good news, go all in."
Wrong.
No rate hike means: you won’t get hit for now. But it doesn’t mean someone will hand you money.
The most dangerous mindset in this market is mistaking "not getting worse" for "getting better."
Don’t mistake stopping the bleeding for recovery.
$BTC$ETH$ZEC#加息预期推迟，9月非农成下一关键
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