Bitcoin fell below the $100,000 threshold on Thursday, weighed down by the prospect of smaller rate cuts in 2025.
While other risk assets like stocks were looking to stage a rebound after a steep plunge on Wednesday, bitcoin continued to sag. The apex token was down by more 5% by midday to trade around $98,835.
Other cryptocurrencies also sold off, with Ethereum and XRP each falling more than 4%. The total crypto market capitalization, meanwhile, was dragged down nearly 7% to $3.41 trillion, according to CoinMarketCap data.
Crypto investors who had driven bitcoin’s rally in recent months were rattled on Wednesday after the Fed’s December policy meeting, which ended with Fed officials issuing hawkish guidance on interest rate hikes next year.
Despite a 25 basis point rate cut, central bankers lowered their 2025 interest rate outlook, and FOMC members forecast just two rate cuts next year, down from four forecast at the September meeting.
Comments from the Fed Chair deepened the sell-off in risk assets Wednesday afternoon, with Powell saying that the central bank would take a more “cautious” stance when changing the policy rate and that the prospect of future rate hikes was not off the table.
“After breaking above $108,000 on Wednesday, Bitcoin has now fallen below $100,000. The entire cryptocurrency industry is under pressure following the stock market crash,” Louis Navellier, chief investment officer at Naviellier & Associates, said in a note. Thursday morning.
Bitcoin surpassed $100,000 for the first time in early December, fueled by a rally that lasted weeks following Donald Trump’s election victory. Crypto enthusiasts have dubbed Trump the “president of crypto,” hoping that he will cheer up the market by reducing regulation and even putting pressure on the U. S. government. It is important to start buying Bitcoin.