Bitcoin Falls Amid Rising Interest Rate Hike Expectations Despite US-Iran Agreement

Bitcoin's value dropped on Thursday, relinquishing much of its recent gains after hawkish signals from the US Federal Reserve strengthened market expectations for interest rate increases within the year.

The signing of a peace agreement between the United States and Iran failed to improve investor sentiment toward cryptocurrencies, which continued to lag noticeably behind technology and artificial intelligence stocks.

Bitcoin declined by 2.8% to reach $63,964.6, while other cryptocurrencies experienced simultaneous drops alongside Bitcoin, showing no significant benefit from the developments in the US-Iran agreement.

Ethereum, the world's second-largest cryptocurrency, fell by 3.6% to $1,729.19, and XRP decreased by 4.3%.

Solana, Cardano, and Binance Coin also saw declines ranging between 3% and 5%.

In the category of meme coins, Dogecoin dropped by 3.5%, whereas Trump Coin fell by 2.9%.

Bitcoin had sharply declined during the previous night’s trading after the Federal Reserve kept interest rates unchanged, as anticipated.

However, the meeting revealed an increasing number of policymakers who consider it necessary to raise interest rates in 2026 due to risks linked to persistent high inflation levels.

Federal Reserve Chair Kevin Warsh indicated the possibility of altering the central bank’s communication approach with markets regarding the interest rate trajectory, adding further uncertainty.

Market data showed investors are now pricing in at least one 25 basis point interest rate hike by the end of 2026.

Higher interest rates are a negative factor for speculative and high-risk assets like cryptocurrencies, as they reduce the appeal of investing in them compared to safer instruments such as debt securities.

Reports released on Wednesday evening indicated that the United States and Iran signed a remote memorandum of understanding to end their conflict and reopen key shipping routes in the Middle East.

This framework agreement paves the way for a new round of talks between Washington and Tehran aimed at reaching a comprehensive and lasting peace deal, with Iran’s nuclear program expected to be a central topic in upcoming negotiations—a matter strongly opposed by the United States.

Although this development triggered a rally in high-risk assets, investors preferred to allocate funds to artificial intelligence and semiconductor stocks, which have stronger financial fundamentals, rather than to more speculative assets like metals and cryptocurrencies.

This trend has accelerated in recent months, resulting in continued outflows from the cryptocurrency market, particularly from exchange-traded funds linked to it.