Bitcoin could rally if Fed pauses rate hikes, Grayscale

In a June 22 research note, Grayscale Investments tied bitcoin’s recent underperformance to a market repricing of Federal Reserve policy expectations. The firm noted U.S. equities have risen about 9% since late February while bitcoin has fallen roughly 1% and gold has dropped about 20%.

Grayscale’s head of research, Zach Pandl, connected the gap to higher investor forecasts for near-term interest rates. One-year Fed rate expectations have climbed by roughly 60 basis points since late February, and about half of Federal Reserve officials have indicated rate increases could be appropriate in 2026. At the June 17 meeting the Federal Open Market Committee voted 12-0 to keep the federal funds rate at 3.5% to 3.75% in Kevin Warsh’s first meeting as Fed chair. The next policy meeting is scheduled for July 28–29, 2026. Central banks outside the U.S., including the European Central Bank, have already raised rates.

Grayscale explained how rising real yields affect assets that do not produce income. As yields on cash and fixed income rise, investors can earn more from those instruments, increasing the opportunity cost of holding non-yielding assets such as bitcoin and gold. The firm said continued spending on artificial-intelligence infrastructure and related technology investment has helped support equities over the same period.

The firm described bitcoin as a scarce digital commodity that provides exposure to public blockchain networks and the broader crypto ecosystem. That position places bitcoin between gold, which is often treated as a monetary hedge, and growth equities, which benefit from technology investment and expectations for future earnings. Grayscale argued that at current levels bitcoin can function as a portfolio diversifier and appears attractively priced relative to stocks.

Pandl wrote: “Our base case is for the Fed to hold off on rate hikes. If we’re right, bitcoin’s price may catch up with stocks.”

Grayscale flagged the recent performance gap among major macro assets as unusually wide and tied future bitcoin returns to the path of U.S. monetary policy and to investor demand for digital-asset exposure linked to blockchain growth.