Updated 12/21 below. This article was originally published on December 20
Bitcoin fell sharply, falling with stock markets after the Federal Reserve warned that inflation remained sticky and BlackRock spooked the market.
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The price of bitcoin fell as low as $90,000 per bitcoin, dragging down the broader crypto market and erasing about $500 billion in value from the $3.2 trillion crypto market.
Bitcoin’s roughly 10% decline over the past 24 hours was overshadowed by that of Ethereum and the top ten smaller cryptocurrencies, including Solana and Dogecoin, which collapsed between 15% and 25%.
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US Federal Reserve Chairman Jerome Powell has warned that inflation will remain a problem next year, triggering a … (+)
This week, Federal Reserve Chairman Jerome Powell disappointed traders by warning that interest rates would not fall as quickly as the Fed had expected, reducing the number of planned cuts to just two in 2025, compared to four previously.
Updated 12/21: Bitcoin price has rebounded, climbing close to $100,000 per Bitcoin after the latest inflation data from the Personal Consumption Expenditures (PCE) index showed a rise weaker than expected 2.4% in November, just below. economists’ estimate of 2.5% interviewed by Reuters.
Other major cryptocurrencies that had slumped, including Ethereum, Ripple’s XRP and dogecoin, have also rebounded, with the combined market recovering a value of around $300 billion as traders increase their bets on the Federal Reserve’s interest rate cuts next year.
Meanwhile, Cathie Wood, founder of hedge fund Ark Investment Management, reiterated her bullish Bitcoin price forecast in a statement. Bloomberg interviewpredicting that the price of bitcoin will reach $1 million by 2030, which would give bitcoin a market capitalization of around $20 trillion.
“(Bitcoin) is becoming even more scarce than gold,” Wood said. “The difference between gold and bitcoin is that when the price of gold increases, as it does, production increases, the rate of increase in supply increases – this cannot happen with the bitcoin.”
Over the coming weeks, bitcoin and crypto market observers expect the bitcoin price to remain subject to sharp fluctuations.
“When it comes to what’s coming up over the holiday season, the first rule of bitcoin is that it’s always volatile in the same way that water is always wet,” said James Toledano, director of the exploitation at Unity Wallet, in comments sent by email.
“Its behavior is always mixed and there is no discernible trend at the end of the year and the beginning of the next year. Sometimes the price increases in the new year and at other times it So, historically, we can say that bitcoin generally exhibits mixed behavior during Christmas and New Years,” Toledano added, highlighting the inauguration of new US President Donald Trump on January 20 as an important date to watch for the market. bitcoin and cryptography.
“The Federal Reserve’s comments were a wake-up call,” Danni Hewson, head of financial analysis at AJ Bell, said in emailed comments.
“Inflation is proving stubborn and tax and tariff cuts could be a recipe for reflation. “Risk appetite has been reduced. Trump 2.0 is a known unknown and no one wants to be overexposed if the climate proves inhospitable. »
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The price of bitcoin has collapsed after its huge rally this year, with the price of bitcoin being … (+)
Meanwhile, bitcoin price and crypto market watchers have warned of further volatility ahead.
“Expect to see volatility levels for Ethereum and Bitcoin increase as we approach the start of 2025, particularly around the December 27, 2025 expiration settlement,” said Nick Forster, founder of the decentralized finance protocol. (DeFi) Derive, in comments sent by email. but he added that he expects the price of Bitcoin and the broader crypto market to recover through 2025.
“We are seeing a trend where funds and high net worth individuals are moving toward options with longer maturities, such as those set for September and beyond, reflecting a positive outlook for 2025. This shift is evident in the open interest in calls that far exceeds the number. » puts on Derive.xyz, signaling strong market optimism.
