Butterfill: Rate Cut Hype Fades; Bitcoin Waits for Real Pivot Signal
Bitcoin (BTC) has treaded water for three months while volatility has squeezed to roughly 26%, a far cry from the fireworks that usually follow easing policy. Butterfill’s report says futures markets flirt with the idea of three cuts this year, but price action says “show me” for now.
The Fed shaved 25 basis points (bps) to a 4.0%–4.25% target range, with newcomer Stephen Miran voting for a meatier half-point. The dot plot’s median now points to another 50 bps of cuts in 2024, with 25-bps reductions penciled in for 2026 and 2027.
How split? Nine see two more trims in 2024, two see one, six see none, and one dot even hints at higher rates by year-end—a “silent dissent” likely from Cleveland Fed President Beth Hammack. The Coinshares analyst explains that another outlier projects as much as 125 bps of 2025 easing.
He also notes that the Summary of Economic Projections muddied things further: stronger 2025 growth, lower joblessness, and still-sticky core inflation, alongside bigger downside employment risks.
Butterfill reads it as a more dovish reaction function—easing despite inflation that refuses to fully cool. That stance can burnish bitcoin’s appeal as protection against monetary debasement.
But he says markets crave confirmation. Until policymakers deliver a clearer, sustained path of cuts, bitcoin seems patiently content to bide its time, compressing volatility and waiting for the Fed to stop whispering and actually sing.
“We interpret this as the Fed adopting a more dovish reaction function, easing policy despite lingering inflation concerns,” Butterfill writes. “For Bitcoin, this shift underscores its role as a hedge against monetary debasement — but the muted market response shows investors are still waiting for stronger confirmation that the Fed is embarking on a sustained easing cycle.”
CME’s FedWatch is practically shouting “done deal,” pegging another 25-basis-point trim at better than a 90% shot. Polymarket gamblers are only slightly less bullish at 86%, while Kalshi’s crowd nods along at 85%—close enough to call it a central-bank slam dunk.
Bitcoin still isn’t budging, and neither are the odds. With the next 25-bps cut a near lock, traders are basically sipping lattes and waiting for Fed Chair Powell to belt the chorus. Until the Fed turns the whisper into a full-throated serenade, bitcoin’s just fine playing the strong, silent type.
