Bitcoin fell slightly on Tuesday, cutting short a recovery over the past week amid growing caution over the U.S. Federal Reserve’s decision on interest rates this week.

While optimism over a 25 basis point cut had driven some gains in Bitcoin, traders remained on edge over just what the Fed will signal with regards to its future rate decisions. 

Growing doubts over the long-term viability of corporate treasuries also weighed, with buying action by top holder Strategy (MicroStrategy (NASDAQ:MSTR)) doing little to drive up prices. 

Bitcoin fell 0.7% to $115,772.1 by 01:17 ET (05:17 GMT). 

Fed rate cut awaited, outlook in focus 

Focus this week is squarely on the Fed’s September 16-17 meeting, where markets almost unanimously expect the central bank to cut interest rates by 25 basis points.

But the central bank’s outlook on rate cuts remains uncertain, given that it has remained largely non-committal towards any future easing plans. Sticky inflation, stemming from higher U.S. trade tariffs, has been the Fed’s biggest point of contention. 

Still, bets on lower rates drove outsized gains in broader risk-driven markets, especially equities. Wall Street indexes soared to record highs in recent sessions.

But crypto has been less upbeat, with its speculative nature keeping traders at bay at least until there is more clarity on the path of U.S. interest rates. 

Still, lower rates tend to benefit speculative assets such as crypto, given that they usually free up more market liquidity. 

SEC, Gemini settle Earn lawsuit 

The U.S. Securities and Exchange Commission on Monday agreed to settle a lawsuit accusing crypto exchange Gemini of failing to register its crypto lending platform, Gemini Earn, before offering it to retail investors. 

Gemini, which recently listed on the Nasdaq as Gemini Space Station Ltd (NASDAQ:GEMI), said the settlement will resolve the lawsuit around Earn. 

Gemini Earn let customers lend Bitcoin and other cryptos to crypto lender Genesis Global in exchange for interest payments. But Genesis halted withdrawals in November 2022 in tandem with the collapse of the FTX exchange, and then filed for bankruptcy. 

Genesis and Gemini were then sued by the SEC in early-2023. 

Crypto price today: altcoins retreat with Bitcoin

Broader crypto prices mostly retreated on Tuesday in tandem with Bitcoin, with caution before the Fed deterring big bids. 

World no.2 crypto Ether fell 2.9% to $4,528.16, while XRP fell 2.2% to $2.9995.

Solana fell 3.2%, while Cardano lost 4.4%. 

Among meme tokens, Dogecoin fell 4.9%, while $TRUMP shed 3.4%.