The cryptocurrency market has dropped a lot after the United States Federal Reserve decided to lower interest rates by 0.25%.
Bitcoin, the main cryptocurrency, saw its price go down from a record high of $108,268 to $95,000 in just 36 hours, which is a big drop of $13,000. This big decrease happened as the whole market is adjusting to changes in the economy.
The Federal Reserve lowered interest rates for the third time this year. Chair Jerome Powell said this might be the last cut for now, mentioning recent information about prices that shows inflation is becoming more stable.
“Today’s decision was not easy, but we believe it was the right thing to do,” Powell said during a meeting with reporters.
Usually, when interest rates go down, it makes cryptocurrencies more attractive to investors. But this time, the announcement seems to have made some investors more careful.
The recent comments by Powell, who said the Federal Reserve can’t hold Bitcoin without approval from Congress, have raised questions about a plan by President-elect Donald Trump to create a Bitcoin reserve.
Trump had promised during his campaign to set up a Bitcoin reserve as part of a strategy to strengthen the U.S.’s position in the global crypto market. But Powell’s statement might make this plan harder to achieve.
Key Points
- – Bitcoin’s value has fallen by $13,000 in just two days, and it’s now worth around $95,430.
- – This drop means a 6.2% loss in the past 24 hours and a 12% decrease from its highest value recently.
- – The market’s response to the Federal Reserve’s decision to lower interest rates and Powell’s careful approach shows how big economic factors affect cryptocurrency prices.
Even though some experienced traders are taking advantage of the lower prices to buy more Bitcoin, the market is still cautious as it deals with changing economic conditions.
