Bitcoin News Update: Federal Reserve's Shift Spurs Surge in Crypto and Stocks, Yet Dangers Remain

Expectations of interest rate reductions by the Federal Reserve have triggered a wave of liquidity in both the crypto and stock markets, with

and equities set to gain from the central bank’s monetary policy shift. , a mortgage REIT, posted a 10.6% economic return for Q3 2025, crediting the positive outcome to the Fed’s move toward a more supportive policy stance, according to . CEO Peter Federico pointed out that agency mortgage-backed securities (MBS) have outperformed U.S. Treasuries for five straight months—a pattern not seen since 2013—indicating renewed risk appetite as borrowing costs fall.

Meanwhile, Bitcoin surged to $114,000 in early October, up 1.5%, amid speculation that Fed rate cuts would prompt investors to shift funds from low-yield money market products into riskier assets,

noted. The digital asset’s rally was accompanied by a $20.3 million net inflow into Bitcoin ETFs on October 23, with BlackRock’s IBIT leading the way by adding $107.8 million in a single day, according to . This comes after BlackRock deposited 2,854 Bitcoin (worth $314 million) into Prime, highlighting growing institutional interest in regulated custody, as reported by .

The Fed’s more accommodative approach has also lifted sentiment across broader markets.

Inc. increased its annual outlook after achieving record customer growth and $2.7 billion in net profit for Q3 2025, reflecting stronger demand for growth stocks in a lower-rate climate, according to . Likewise, former Ripple Labs executive Antony Welfare suggests that if just 5-10% of the $7.4 trillion in money market funds moves into crypto, Bitcoin could reach new highs, challenging bearish views, as reports.

Bitcoin mining firms are also benefiting from increased liquidity. HIVE Digital Technologies has scaled its mining capacity in Paraguay to 22 EH/s, utilizing hydroelectric energy and aiming for 35 EH/s by 2026, according to

. The company’s expansion parallels BlackRock’s ongoing Bitcoin accumulation, with both positioning themselves for future institutional growth.

Still, not all signals are positive. Inflows into Bitcoin treasuries have dropped by 99%, leading analysts to advise dollar-cost averaging and diversifying with gold and short-term bonds to manage risk, according to

. Furthermore, while Bitcoin ETFs have regained momentum, ETFs continue to see outflows, showing a split in investor sentiment within the crypto sector, as previously reported by Crypto News.

The Fed’s policy changes have also impacted niche tokens. World Liberty Financial (WLFI), a Trump-affiliated token, jumped 12% in one day, outperforming both Bitcoin and Ethereum, though its 70% drop from its peak highlights the speculative risks, according to a

.

As the Fed signals further rate cuts, investors remain cautiously hopeful. AGNC’s CFO Bernice Bell stated that reduced funding costs and capital deployment are expected to provide a “moderate tailwind” for net spread income, as previously mentioned by Seeking Alpha, while crypto analysts point to the possibility of trillions in liquidity entering digital assets. With Bitcoin testing $115,000 and T-Mobile shares nearing $229, the connection between easier monetary policy and asset performance highlights a wider shift of capital in pursuit of better returns.