Updated 12/21 below. This article originally published on December 20.
Bitcoin fell sharply, falling with stock markets after the Federal Reserve warned inflation remained sticky and BlackRock spooked the market.
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Bitcoin’s value fell as low as $90,000 compared to bitcoin, dragging down the broader crypto market and wiping around $500 billion out of the $3. 2 trillion crypto market.
Bitcoin’s drop of around 10% in the last 24 hours was dwarfed by ethereum and smaller, top ten cryptocurrencies—including solana and dogecoin—that crashed back by between 15% and 25%.
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This week, Federal Reserve Chair Jerome Powell disappointed investors by warning that interest rates would fall as temporarily as the Fed had hoped, reducing the number of planned cuts to just two in 2025, from four previously. .
12/21 update: Bitcoin worth has rebounded, to a distance close to $100,000 consistent with bitcoin after the newest Personal Consumption Expenditures Index (PCE) inflation knowledge showed a smaller-than-expected rise of 2. 4% in November, just below. the estimate of 2. 5% of economists polled through Reuters.
Other crashing primary cryptocurrencies, including Ethereum, Ripple’s XRP and Dogecoin, also recovered, with the combined market regaining a price of around $300 billion as investors increased their bets on rate cuts interest rates from the Federal Reserve next year.
Meanwhile, Cathie Wood, founder of hedge fund Ark Investment Management, reiterated her bullish prediction of Bitcoin’s value in an interview with Bloomberg, predicting that Bitcoin’s value would exceed $1 million by 2030, giving Bitcoin a market capitalization of around $20 trillion.
“[Bitcoin] is even more scarce than gold,” Wood said. “The difference between gold and bitcoin is that when the value of gold increases, as it does, production increases, the rate of accumulation at the source increases, this happens with bitcoin. “
Over the next few weeks, bitcoin and cryptocurrency market watchers expect the price of bitcoin to remain subject to sharp fluctuations.
“As for what’s coming up during the holiday season, the first rule of bitcoin is that it is volatile in the same way that water is wet,” said James Toledano, chief operating officer at Unity Wallet, in emailed comments.
“Their behavior remains mixed and there is no discernible trend at the end of the year and the beginning of the following year. Sometimes the value goes up in the new year and sometimes it goes down. So, historically, we can say that Bitcoin exhibits a combined habit at Christmas and New Year,” Toledano added, pointing to the inauguration of the new U. S. President Donald Trump on Jan. 20 as a vital date to watch out for the Bitcoin and crypto market.
“Comments from the Federal Reserve were a wake-up call,” Danni Hewson, AJ Bell’s head of financial analysis, said in emailed comments.
“Inflation is proving sticky and tax cuts and tariffs could be a recipe for reflation. “Risk appetite has been pared back. Trump 2.0 is a known unknown and no one wants to be overexposed if the climate proves inhospitable.”
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Bitcoin’s value plummeted after its massive rally this year, Bitcoin’s value. . . [ ] It dropped towards $90,000 and dragging down the rest of the crypto market.
Meanwhile, bitcoin price and crypto market watchers have warned of further volatility ahead.
“Expect to see volatility levels for Ethereum and Bitcoin increasing as we get closer to the start of 2025, especially around the December 27, 2025 expiry agreement,” said Nick Forster, founder of decentralized finance (DeFi) protocol Derive, in comments sent by email. but added that he expects the value of Bitcoin and the broader crypto market to reach 2025.
“We’re observing a trend where funds and high net-worth individuals are moving into options with longer expiries, like those set for September and beyond, reflecting a positive outlook for 2025. This shift is evident from the open interest in calls significantly outnumbering puts on Derive.xyz, signaling strong market optimism.”
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