On September 22, 2021, all eyes in the financial world were fixed on Washington, D.C., as Federal Reserve Chair Jerome Powell concluded a closely watched two-day FOMC meeting. The crypto market, already rattled by the Evergrande crisis unfolding in China, was hanging on every word from the central bank — and the stakes could not have been higher.
Bitcoin had spent the prior 48 hours in freefall, dropping as much as 5.7% to touch $42,955 amid a global risk-off wave triggered by fears of a potential default by Chinese property giant China Evergrande. Ethereum was having an equally rough week, briefly dipping below $3,000. But by the time Powell took the podium, the market had already begun to find its footing — and the Fed’s relatively measured tone would give crypto bulls the green light to stage a remarkable recovery.
TL;DR
- The Fed concluded its September 2021 FOMC meeting on September 22, with Chair Powell signaling a potential tapering of asset purchases “soon”
- Bitcoin traded below $43,000 ahead of the announcement before rallying 7% to close near $43,567
- Ethereum surged 11% to $3,077 as risk appetite returned across crypto markets
- The PBOC injected 90 billion yuan ($14 billion) in short-term liquidity, helping calm global markets
- Almost all major cryptocurrencies recovered from the prior day’s Evergrande-driven losses
The Fed Holds the Line: No Immediate Taper, but a Clear Signal
The September 2021 FOMC meeting arrived at a peculiar moment for global markets. The Evergrande debt crisis had sent shockwaves through equities, commodities, and crypto alike. Treasury yields were seesawing, with the 10-year note climbing to 1.333% ahead of the decision. Investors desperately needed a signal — any signal — about the path forward for monetary policy.
Powell delivered a carefully balanced message. The Fed kept interest rates unchanged at near-zero levels and did not immediately announce a reduction in its $120 billion monthly asset purchase program. However, the central bank made clear that tapering was coming “soon,” with most analysts interpreting the statement as a signal that the bond-buying reduction would begin in November 2021.
For crypto markets, this was about as good an outcome as could be expected. The absence of an immediate taper announcement meant that the liquidity pipeline supporting risk assets — including Bitcoin and Ethereum — remained wide open, at least for a few more weeks.
Crypto’s Remarkable Recovery
The market reaction was swift and decisive. According to Kraken’s daily market report, total spot trading volume hit $1.49 billion on September 22, above the 30-day average of $1.42 billion. Futures notional reached $497.7 million. The message was clear: capital was flowing back into crypto at speed.
Bitcoin led the charge with a 7% gain, reclaiming the $43,567 level. Ethereum was even more impressive, surging 11% to $3,077.40. But the real standouts were in the altcoin space. Cosmos (ATOM) exploded 31% higher to $39.90, Polkadot (DOT) gained 20% to $31.60, and Solana (SOL) added 19% to reach $148.20. Even Dogecoin joined the party, climbing 12%.
The recovery was broad-based. Of the dozens of tokens tracked by major exchanges, almost every single one was in the green by the end of the day, reversing the heavy losses sustained during the Evergrande panic of September 20-21.
China’s PBOC Plays Firefighter
While the Fed meeting dominated Western headlines, the People’s Bank of China was quietly doing its part to stabilize global sentiment. The PBOC injected an additional round of short-term liquidity into the Chinese economy on September 22, bringing the total to 90 billion yuan — roughly $14 billion according to Deutsche Bank estimates.
The move appeared to calm investor jitters, at least temporarily. Mainland Chinese markets reopened after the two-day autumn holiday, with the Shanghai Composite gaining 0.4% in afternoon trading. The Hang Seng was closed, meaning no price action on Evergrande for the day — which, paradoxically, may have helped sentiment by removing a source of selling pressure.
The Pyth Network Glitch: A $5,400 Bitcoin
In a bizarre sideshow to the day’s events, a leading Wall Street data provider briefly displayed a Bitcoin sell price of $5,402 — a 90% discount to the actual market price. The glitch, attributed to the Pyth Network, was quickly corrected, but it underscored the extreme volatility and technical fragility that characterized crypto markets during this period.
For a few minutes, traders across social media were left wondering whether a catastrophic flash crash had occurred. It hadn’t — but the incident served as a reminder that in crypto, data reliability remains an ongoing concern.
Why This Matters
The September 22, 2021 FOMC meeting was a watershed moment for the relationship between Federal Reserve policy and cryptocurrency markets. It demonstrated that crypto had become a genuine macro-sensitive asset class, moving in real-time on central bank communications. The speed and scale of the recovery — with billions in spot volume and double-digit percentage gains across the board — showed just how much latent demand existed for digital assets when policy conditions remained supportive.
The episode also highlighted the interconnected nature of global risk markets. A Chinese property developer’s debt troubles could send Bitcoin tumbling, while a carefully worded Fed statement could reverse the damage in hours. For regulators watching from the sidelines, the message was unmistakable: crypto was no longer a fringe market that could be ignored in the broader financial stability conversation.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.