- Bitcoin fell below $100,000 on Thursday as traders were rattled by the Fed’s rate guidance.
- The crypto fell more than 5% to trade around $98,000.
- Other cryptocurrencies, like Ethereum and XRP, also fell.
Bitcoin fell below the $100,000 threshold on Thursday, weighed down by prospects of smaller rate cuts in 2025.
As other risk assets, like stocks, looked to rebound after a sharp fall on Wednesday, bitcoin continued to slump. The apex token was down more than 5% by midday to trade around $98,835.
Other cryptocurrencies were also sold off, with Ethereum and XRP each falling more than 4%. At the same time, the total crypto market cap declined by almost 7%, to $3.41 trillion, according to data from CoinMarketCap.
Crypto investors who had fueled bitcoin’s sharp rise in recent months were shaken Wednesday after the Fed’s December policy meeting, which ended with Fed officials issuing hawkish guidance on the the evolution of interest rates next year.
Despite a 25 basis point rate cut, central bankers lowered their interest rate outlook for 2025, with FOMC members forecasting only two rate cuts next year, compared to four planned in the September meeting.
The Fed chair’s comments added to the selling of risk assets on Wednesday afternoon, with Powell saying the central bank would take a more “cautious” stance when changing the benchmark rate and that the prospect of future rate hikes was not excluded.
“After surpassing $108,000 on Wednesday, Bitcoin has now fallen below $100,000. The entire crypto sector is under pressure following the stock market downturn,” said Louis Navellier, Chief Investment Officer from Naviellier & Associates, in a note. Thursday morning.
Bitcoin surpassed $100,000 for the first time in early December, pushed higher by a weeks-long rally following Donald Trump’s election victory. Crypto enthusiasts have dubbed Trump the “crypto president,” with hopes that he will boost the market by reducing regulation and even push the U.S. government to start buying Bitcoin itself.
