Bitcoin Slides Below $101K as Fed Chair Powell's Hawkish Stance Shakes Markets
Bitcoin (BTC) tumbled to $100,300 after Federal Reserve Chair Jerome Powell's hawkish remarks during the Federal Open Market Committee (FOMC) meeting.
Despite an anticipated 25 basis point cut in U.S. interest rates, bringing them to a 4.5%-4.75% range, markets reacted negatively. As of press time, Bitcoin was down 5.7% over the past 24 hours, trading at $100,740.
Broad Market Decline
The downturn extended across the crypto sector. Ethereum (ETH) dropped 6.8% to $3,697, while Binance Coin (BNB) and Solana (SOL) fell 4.6% and 8.1%, respectively. Dogecoin (DOGE) saw the sharpest drop among the top 10 cryptocurrencies, plunging 11% to $0.348.
Traditional markets also stumbled. The S&P 500 closed 1.55% lower, and the Nasdaq 100 dipped by 2%. In the crypto-related stock space, Coinbase’s COIN stock dropped 6.6%, and MicroStrategy’s MSTR declined 5.7%.
Powell Signals a Slower Pace Toward 2025
Powell hinted at a more cautious monetary policy moving forward, citing inflation concerns and uncertainties. While rate cuts in 2025 remain possible, their extent will depend on next year’s data.
The London Stock Exchange reported that U.S. rate futures now project just two cuts in 2024, with expectations for 2025 cuts trimmed from 49 to 37 basis points. Prediction markets like Kalshi suggest a 90% chance of no cuts by January 2025.
Still, Powell expressed optimism, stating, "Our policy is in a really good place, and I expect another good year next year."
Bitcoin Strategic Reserve?
When questioned about the idea of a U.S. Bitcoin Strategic Reserve, Powell clarified that the Federal Reserve is not permitted to hold Bitcoin, and any such move would require congressional approval. He added, "We are not looking for a law change at the Fed," declining to elaborate further.
As markets digest the Fed’s stance, volatility continues to ripple through both crypto and traditional assets.