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- Bitcoin Dips Below $101K as Fed’s Hawkish Tone Rattles Markets
- Crypto Market Retreats: Bitcoin and Altcoins Slump After Fed Announcement
- Federal Reserve’s Hawkish Stance Sends Bitcoin Tumbling
- Bitcoin’s Rollercoaster Ride: Falls to $101K Amid Tightening Fed Policy
Bitcoin Drops to $101K Following Hawkish Federal Reserve Stance
Bitcoin’s recent rally came to a halt on Thursday as the U.S. Federal Reserve’s hawkish outlook rattled investors and raised concerns about tightening monetary policy. After reaching an all-time high earlier in the week, Bitcoin slipped by 2.6%, trading at $101,153 by early morning U.S. time. During the session, the cryptocurrency even briefly dipped below the $100,000 mark, showcasing the volatility in the market.
The drop in Bitcoin’s price was largely triggered by comments from Fed Chairman Jerome Powell. Despite the Federal Reserve cutting interest rates by 25 basis points, Powell signaled a cautious approach for future rate reductions. The Fed now anticipates only two rate cuts in 2025, a more restrained projection compared to previous expectations of four cuts. This slower path for easing monetary policy spooked risk-sensitive assets, including cryptocurrencies, leading to a broad sell-off.
Powell Dismisses Bitcoin Reserve Plans, Dampens Sentiment
Adding to the uncertainty, Powell also addressed speculation surrounding a potential U.S. Strategic Bitcoin Reserve. With incoming President Donald Trump raising the possibility of such a reserve, Bitcoin bulls were initially optimistic. However, Powell made it clear that the Federal Reserve had no plans to accumulate substantial amounts of Bitcoin. He stressed that such an initiative would require Congressional action, further fueling skepticism about whether Trump’s proposed reserve would come to fruition.
While Powell’s remarks didn’t directly impact the potential for a Bitcoin reserve, they raised doubts about the feasibility of the plan. Regulatory hurdles and a lack of concrete details from the Trump administration have left many questioning the likelihood of a U.S. Bitcoin reserve becoming a reality.
El Salvador Reverses Bitcoin Push Amid IMF Deal
In related news, El Salvador’s President Nayib Bukele, who made headlines in 2021 by adopting Bitcoin as legal tender, has scaled back his ambitious plans. Bukele agreed to tone down his push for Bitcoin in exchange for a crucial $1.4 billion loan from the International Monetary Fund (IMF). This marks a significant shift in the country’s crypto strategy, which included plans for Bitcoin-backed bonds.
Despite the recent retreat in Bitcoin’s global adoption, El Salvador’s Bitcoin reserves have surged in value during the cryptocurrency’s latest rally. However, the government’s decision to prioritize an IMF deal over its crypto ambitions highlights the balancing act between embracing Bitcoin and addressing economic stability.
Altcoins Follow Bitcoin’s Slide After Fed Meeting
Bitcoin wasn’t the only cryptocurrency to suffer after the Fed’s hawkish tone. Altcoins also took a hit, with most experiencing significant losses after two consecutive days of decline. Ethereum, the world’s second-largest cryptocurrency, fell 4.7%, extending its downward trend. XRP dropped by 5.6%, Solana by 2.5%, and Polygon tumbled by 6%.
Dogecoin, the popular meme token, mirrored the broader market downturn, losing 5.6%. Investors were quick to liquidate positions in the wake of the Fed’s announcement, signaling caution across the crypto space.
Global Crypto Developments: Hong Kong’s Regulatory Moves
Despite the bearish market sentiment, there were positive developments elsewhere in the crypto world. Hong Kong’s securities regulator approved four cryptocurrency exchanges as part of the city’s efforts to establish itself as a global hub for digital asset trading. This move is expected to increase competition and innovation in the crypto space, positioning Hong Kong as a key player in the evolving landscape of digital finance.
As cryptocurrencies remain sensitive to macroeconomic signals, the impact of traditional financial policies, like those from the Federal Reserve, will continue to influence market dynamics. For now, Bitcoin and its peers are navigating uncertain waters, with investors keeping a close eye on future developments in U.S. monetary policy and global crypto adoption.
