Bitcoin is showing signs of topping out as investors await the Federal Reserve’s September 17 rate cut, warned Bitcoin critic Peter Schiff. Over the weekend, Bitcoin (BTC) and the broader crypto market faced selling pressure despite gaining 4% on the weekly chart. The largest cryptocurrency continues to struggle at strong resistance near $116,000.
Schiff, a well-known Bitcoin skeptic, criticized the Fed’s expected monetary policy pivot. Analysts anticipate at least a 25-basis-point rate cut, but Schiff believes reducing rates amid rising inflation could heighten economic risks.
Schiff pointed out that traditional safe-haven assets like gold and silver are gaining strength, while Bitcoin appears to be losing momentum. “The NASDAQ and S&P hit new record highs and gold hit a new record high. He added, “Given that Bitcoin is still 15% below its 2021 peak priced in gold should be a concern.”
He also highlighted that Bitcoin has not fully benefited from optimism around the Fed rate cut. While investors are buying both risk assets and safe havens, they are reportedly selling Bitcoin. Following last week’s crypto market rally, many investors are waiting on the sidelines for the next directional move.
Rate cut implications for crypto
Goldman Sachs forecasts that the Fed will reduce rates three times in September, October, and December, and further reductions in 2026, which may take the rates to 3-3.25%.
Historically, digital assets like Bitcoin often bottom before U.S. equities. Although, in September, altcoins have shown stronger gains than Bitcoin, suggesting that altcoin season may be underway.
Further, market expert Ted Pillows said that historically, U.S. interest rate cuts can create short-term bearish pressure on risk assets, signaling potential economic challenges.
For now, the market will be keen on the response of Bitcoin to the Fed’s decision, because the rate cut cycle could establish the next significant trend of the market.