Bitcoin briefly dipped below $100,000 on Thursday, following the Federal Reserve’s tempered outlook on interest-rate cuts, which weighed on speculative investments. The world’s largest cryptocurrency hit a low of $98,760 before recovering above the six-figure mark. Other digital assets, including Ethereum and Dogecoin, also faced headwinds.
The Federal Reserve reduced borrowing costs for the third consecutive time but signaled a more restrained pace of cuts in 2025. Chair Jerome Powell emphasized that additional progress on inflation is necessary before the central bank considers further easing monetary policy.
Market Reaction
Tony Sycamore, Market Analyst at IG Australia Pty, noted that the Fed’s announcement shouldn’t have come as a surprise to investors monitoring recent robust U.S. inflation and economic data. However, it acted as a catalyst for trimming speculative excesses in risk assets, including cryptocurrencies and equities, which had rallied following the U.S. election.
The Fed’s decision strengthened the dollar and exerted pressure on global equities and bonds. Meanwhile, concerns about a potential partial U.S. government shutdown due to a funding bill dispute added to market jitters.
Bitcoin has risen approximately 50% since the U.S. elections on November 5, buoyed by President-elect Donald Trump’s pro-crypto stance. Trump has pledged to deregulate the industry and has even floated the idea of creating a national Bitcoin reserve.
Mixed Sentiment
Despite the dip, many analysts remain optimistic about Bitcoin’s long-term trajectory. Paul Veradittakit, Managing Partner at Pantera Capital, highlighted strong underlying support for Bitcoin, saying, “All signs point to a good floor and outlook for Bitcoin,” even as traders booked profits following the Fed meeting.
Trump’s embrace of cryptocurrency has contrasted with the Biden administration’s stricter regulatory measures, implemented after the 2022 market crash revealed widespread fraud and risky practices.
However, caution persists among traders. Sean McNulty, Director of Trading at Arbelos Markets, observed increased demand for options to hedge against potential Bitcoin declines. Zann Kwan, Chief Investment Officer at Revo Digital Family Office, suggested that Bitcoin could briefly retreat to the low $90,000s.
Current Market Position
As of 5:52 a.m. in London, Bitcoin was trading at $101,280. While the Fed’s cautious stance introduced near-term volatility, Bitcoin’s recent rally underscores its resilience and continued investor interest as 2025 approaches.
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