The policy double whammy has landed! The Fed remains unchanged + the White House's digital asset report is out, BTC briefly fell below $117,000.

On July 31, the Fed's FOMC meeting maintained the federal funds interest rate at 4.25%-4.5% (with a maximum of 2 dissenting votes in nearly 30 years), but Powell stated that he would suppress expectations for a rate cut in September (CME probability plummeted to 47%). Coupled with the White House's release of the report "Strengthening America's Leadership in Digital Financial Technology," Bitcoin (BTC) responded with a fall, dropping below the $117,000 mark in the afternoon. The report clearly prohibits the issuance of a central bank digital currency (CBDC) in the U.S., supports the "Anti-CBDC Act," and also proposed a "fiscally neutral way to increase Bitcoin strategic reserves," which sparked heated discussions in the market.

Fed Decision: Hawkish Signals Suppress Crypto Market

• Interest Rate Decision: Paused interest rate hikes for the third consecutive time, maintaining a target range of 4.25%-4.5%, but recorded the highest number of dissenting votes (2 votes) since 1993, indicating internal disagreements on rate cuts.
• Market Expectations Shift: Powell stated "no decision on September rate cut", coupled with strong GDP (Q2 growth of 3%) and ADP employment data (+104,000), CME FedWatch shows the probability of a September rate cut plummeted from 63% to 47%.
• Breaking Historical Patterns: Despite BTC rising after the first four FOMC meetings before 2025 (January +3%, March +4%, May +1.3%, June +0.8%), this time BTC fell from $118,650 to $117,100 following the decision, reflecting hawkish stance dominating market sentiment. VanEck's Head of Digital Asset Research, Matthew Sigel, pointed out: “Bitcoin is a hedge against currency devaluation, and if the Fed signals easing, it will be a green light for the crypto market.”

Core Interpretation of the White House Report: Encouraging Innovation While Strengthening Dollar Hegemony The White House Digital Asset Working Group released a 166-page policy framework, with key points including:

1. Regulatory Breakthrough: Requires the SEC and CFTC to "immediately open federal-level digital asset trading", clarifying rules for registration, custody, trading, and record keeping.
2. DeFi Support: Propose to adopt Safe Harbor( and Regulatory Sandboxes) to promote DeFi technology integration.
3. Stablecoin Acceleration: Urge institutions to rapidly implement the legislated "Genius Stablecoin Act" to "defend the sovereignty of the dollar."
4. CBDC Ban: Clearly oppose and suggest legislation to prohibit the issuance of Central Bank Digital Currency in the United States, supporting the House of Representatives' passage of the "Anti-CBDC Act."
5. Bitcoin Strategic Reserve:
   • Managed by the Ministry of Finance, with initial assets being government-seized cryptocurrency.
   • Bitcoin held in reserve will be treated as a long-term strategic asset and will not be sold.
   • Require the Ministry of Finance and the Ministry of Commerce to formulate a "Fiscal Neutral (Zero Budget Cost)" strategy for increasing Bitcoin holdings to avoid taxpayer burden.

Market Reaction: BTC is under pressure and falling back, ETH spot ETF support is becoming apparent

• Bitcoin ( BTC ): fell from a daily high of $118,650 to $117,100 (intraday -1.3%), continuing to be constrained within the $115,000-$120,000 range. LMAX strategist Joel Kruger stated: "From a technical perspective, BTC is still in a consolidation phase after historical highs."
• Ethereum ( ETH ): Slightly increased to $3,770 against the trend, with a monthly increase of over 50%. Kruger pointed out that "spot ETF capital flows continue to support ETH's relative strength."
• Crypto Stocks:
  • Spot Bitcoin ETFs generally fell by 0.5% (such as IBIT), but the technical pattern is still in a flat base breakout buy point.
  • Strategy(MSTR)'s increase has narrowed, previously adding $246 million (unit price $117,256) to hold 21,021 BTC, with a total position of 628,791 coins (cost $73,277/coin).

Conclusion: The Fed's hawkish tendency and the "contradictory stance" of the White House digital asset report—encouraging blockchain innovation while firmly banning CBDC and reinforcing the dollar's hegemony—inject new variables into the crypto market. Although the report's proposal for "fiscal neutrality to increase Bitcoin holdings" may provide long-term benefits, short-term policy uncertainty continues to suppress risk assets. Investors should focus on:

1. Changes in September Rate Cut Probability and Subsequent Statements from Fed Officials
2. White House Bitcoin Strategic Reserve Implementation Details
3. The regulatory progress of the "Genius Stablecoin Act" and the "CLARITY Act"
4. Can Bitcoin Spot ETF Capital Flows Withstand Macroeconomic Headwinds

The market direction will be determined once the above factors are clarified, and the range-bound oscillation pattern is likely to continue in the short term.