Federal Reserve Wake-Up Call Sparks $500 Billion Bitcoin and Cryptocurrency Market Depreciation
Bitcoin has taken a significant hit, plunging alongside stock markets following the Federal Reserve's announcement that inflation remains persistent. Moreover, the investment giant, BlackRock, had a chilling effect on the market.
*Claim your $3,000+ worth of NFT, web3, and crypto rewards - Apply Today!***
The value of bitcoin has nosedived towards $90,000 per coin, pulling the entire crypto market downward and erasing around $500 billion from the $3.2 trillion crypto market's total worth.
Bitcoin's 10% decline over the past 24 hours was eclipsed by ethereum and other prominent cryptocurrencies in the top 10, such as solana and dogecoin, which saw drops ranging from 15% to 25%.
*Join the CryptoCodex now - A short, daily newsletter for traders, investors, and crypto enthusiasts to stay current and ahead of the bitcoin and crypto market surge**
This week, Federal Reserve Chairman Jerome Powell disappointed traders by stating that interest rates would not decrease as quickly as previously anticipated, reducing the planned number of rate cuts to just two in 2025, down from the previous four.
"The Federal Reserve's statements served as a wake-up call," Danni Hewson, AJ Bell's head of financial analysis, commented via email. "Inflation is proving stubborn, while tax cuts and tariffs could spur inflation. Risk appetite has noticeably diminished, and nobody wants to be overly invested if the environment proves unfavorable for 'Trump 2.0.' "
*Join the CryptoCodex now - A free daily newsletter for the curious about crypto
Meanwhile, market watchers champions of bitcoin and crypto have raised concerns about potential further market volatility.
"Anticipate heightened volatility for both ethereum and bitcoin as we approach early 2025, particularly around the December 27, 2025 settlement," Nick Forster, founder of the decentralized finance (DeFi) protocol Derive, noted via email. "However, I remain optimistic about the recovery of the bitcoin price and the wider crypto market through 2025."
"We're witnessing a trend wherein funds and wealthy individuals are shifting their investments into options with longer expirations, like those slated for September and beyond," Forster added. "This move reflects a positive sentiment for 2025, as revealed by the abundance of calls with more open interest than puts on Derive.xyz, indicating a robust market outlook."
The Bitcoin price drop, leading to a loss of around $500 billion, has been referred to as a 'crypto crash', affecting not just Bitcoin but other cryptocurrencies as well. This 'Bitcoin crash' saw Bitcoin's value plunge towards $90,000 per coin, with prominent cryptocurrencies like Ethereum, Solana, and Dogecoin experiencing similar declines.
