Bitcoin Price Drop Shocks Market After Fed Signals Caution on Rate Cuts
Key Points:
- Bitcoin price dropped in 3 months, falling to $99,490 after the Fed’s cautious stance on rate cuts.
- Despite the third consecutive rate cut, the Fed signals fewer cuts ahead in 2025, weighing on risk assets like Bitcoin.
- Bitcoin surged 50% since Nov. 5, hitting $108,316, boosted by President-elect Trump’s pro-crypto stance.
Bitcoin experienced its biggest drop in over three months on Wednesday, with a Bitcoin price drop of 5.9%, pushing the cryptocurrency to $99,490.
Bitcoin Faces Sharp Decline Amid Fed’s Cautious Rate Cut Stance
This retreat is part of a broader pullback in speculative investments triggered by the Federal Reserve’s decision to signal greater caution regarding future interest rate cuts. Although the Fed lowered borrowing costs for the third consecutive time, it scaled back its expectations for cuts in 2025. Fed Chair Jerome Powell emphasized that more progress on inflation is needed before additional rate reductions.
IG Australia Market Analyst Tony Sycamore noted that the Fed’s decision shouldn’t surprise investors, given the recent strong U.S. inflation and economic data. However, it acted as a catalyst for wiping out some of the speculative excesses that had fueled a surge in risk assets, including the Bitcoin price drop, particularly after the U.S. election.
Read more: Fed Interest Rates Cut Makes Crypto Markets Excited Again
Fed Signals Fewer Rate Cuts in 2025, Affecting Risk Assets
The Fed’s cautious stance led to a surge in the U.S. dollar while global stocks and bonds slid. Growing concerns over a potential U.S. government shutdown added to the nervous market sentiment. U.S. equity futures also wavered early Thursday.
Bitcoin had surged by 50% since the Nov. 5 election, reaching a record high of $108,316 earlier this week, driven mainly by President-elect Donald Trump’s support for cryptocurrency deregulation. Trump’s backing of a national strategic Bitcoin stockpile had bolstered investor confidence. Despite this, Pantera Capital’s Paul Veradittakit remains optimistic, pointing to strong signs of a solid floor for Bitcoin, even as some traders profited in response to the Bitcoin price drop following the Fed meeting.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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Bitcoin Price Drop Shocks Market After Fed Signals Caution on Rate Cuts
Key Points:
- Bitcoin price dropped in 3 months, falling to $99,490 after the Fed’s cautious stance on rate cuts.
- Despite the third consecutive rate cut, the Fed signals fewer cuts ahead in 2025, weighing on risk assets like Bitcoin.
- Bitcoin surged 50% since Nov. 5, hitting $108,316, boosted by President-elect Trump’s pro-crypto stance.
Bitcoin experienced its biggest drop in over three months on Wednesday, with a Bitcoin price drop of 5.9%, pushing the cryptocurrency to $99,490.
Bitcoin Faces Sharp Decline Amid Fed’s Cautious Rate Cut Stance
This retreat is part of a broader pullback in speculative investments triggered by the Federal Reserve’s decision to signal greater caution regarding future interest rate cuts. Although the Fed lowered borrowing costs for the third consecutive time, it scaled back its expectations for cuts in 2025. Fed Chair Jerome Powell emphasized that more progress on inflation is needed before additional rate reductions.
IG Australia Market Analyst Tony Sycamore noted that the Fed’s decision shouldn’t surprise investors, given the recent strong U.S. inflation and economic data. However, it acted as a catalyst for wiping out some of the speculative excesses that had fueled a surge in risk assets, including the Bitcoin price drop, particularly after the U.S. election.
Read more: Fed Interest Rates Cut Makes Crypto Markets Excited Again
Fed Signals Fewer Rate Cuts in 2025, Affecting Risk Assets
The Fed’s cautious stance led to a surge in the U.S. dollar while global stocks and bonds slid. Growing concerns over a potential U.S. government shutdown added to the nervous market sentiment. U.S. equity futures also wavered early Thursday.
Bitcoin had surged by 50% since the Nov. 5 election, reaching a record high of $108,316 earlier this week, driven mainly by President-elect Donald Trump’s support for cryptocurrency deregulation. Trump’s backing of a national strategic Bitcoin stockpile had bolstered investor confidence. Despite this, Pantera Capital’s Paul Veradittakit remains optimistic, pointing to strong signs of a solid floor for Bitcoin, even as some traders profited in response to the Bitcoin price drop following the Fed meeting.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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