CME FedWatch data now prices the probability of a September Federal Reserve rate hike at approximately 70.2%, a sharp increase from 37% one week earlier. This shift in market expectations introduces a significant monetary headwind for digital assets, complicating the recovery trajectory for Bitcoin and challenging the feasibility of extreme price targets for XRP.
The potential move would raise the federal funds target range from 3.5% to 3.75% up to 3.75% to 4%. Financial news account Walter Bloomberg highlighted this surge in odds, while traders on the prediction platform Kalshi remain more divided. As of Thursday morning, Kalshi users assigned a 53% probability to a 25-basis-point hike, a 46% chance the Fed would hold rates steady, and only a 2% likelihood of a larger increase. The Federal Reserve is scheduled to announce its decision following a two-day meeting on September 15 and 16.
At its July meeting, the central bank kept rates at 3.5% to 3.75% while acknowledging that inflation remained above its 2% objective. Three policymakers voted for an immediate quarter-point increase at that time, signaling that pressure for tighter monetary policy had been building prior to recent oil price movements. Higher interest rates generally reduce the relative appeal of volatile assets that do not generate predictable income by raising returns on cash and government bonds. An IMF working paper noted that Federal Reserve tightening historically reduced the broader crypto factor through the risk-taking channel, suggesting Bitcoin could lose momentum if rates rise.
Despite the monetary headwind, sentiment on Bitcoin remains cautiously bullish on prediction markets. Kalshi currently gives Bitcoin a 72% chance of trading above $80,000 during September and a 50% chance of exceeding $82,500. From its current price near $77,800, Bitcoin would need to gain approximately 5.4% to reach $82,000. The asset gained roughly 25% in August, its strongest monthly performance in nearly two years, and analysts point to four consecutive positive Septembers as a potential tailwind. However, the immediate technical challenge is converting the $80,000 resistance level into support.
The rate outlook poses a distinct obstacle for XRP, particularly regarding Jake Claver’s prediction that the token will exceed $750 before the end of 2026. Claver defended this forecast on X, noting he had made a public bet on the outcome. His scenario relies on a rapid succession of events, including institutional investment, ETF-driven demand, tokenized financial-market activity, and an extreme supply shock. Common Sense Crypto host Rich argued that reaching $750 this year would require "full-scale scarcity," where almost no XRP remains on exchanges while demand accelerates. He suggested $100 might be more achievable if regulatory clarity and institutional adoption surged, though both targets remain speculative.
At approximately $1.37, XRP would need to rise around 54,600% to reach Claver’s $750 target. A September rate hike would work against the central assumption of Claver’s forecast: that vast amounts of liquidity will rapidly move into XRP. Higher rates make Treasury securities and cash more attractive, potentially reducing demand for speculative assets. Even under looser monetary policy, XRP would require an unprecedented combination of factors to approach such a massive valuation.