Updated on 12/21 below. This post was originally published on December 20th
Bitcoin plunged along with the stock market after the US Federal Reserve warned that inflation remained high and BlackRock surprised the market.
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The price of Bitcoin plummeted towards $90,000 per Bitcoin, sending the entire crypto market into decline and erasing about $500 billion worth of value from the $3.2 trillion crypto market.
Bitcoin, which has fallen about 10% in the past 24 hours, dwarfed Ethereum, which has fallen between 15% and 25%, and smaller top 10 cryptocurrencies, including Solana and Dogecoin.
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US Federal Reserve Chairman Jerome Powell has warned that inflation will remain a problem next year. … (+)
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This week, Federal Reserve Chairman Jerome Powell warned that interest rates will not fall as quickly as the Fed previously thought, reducing the number of rate cuts planned by 2025 from four to two. Traders were disappointed by warning that they would be cut back.
Updated 12/21: Bitcoin price rebounds to reach $100,000 per Bitcoin after the latest inflation data from the Personal Consumption Expenditures (PCE) Index shows a smaller than expected 2.4% rise in November It rose to that point. Economists polled by Reuters had expected 2.5%.
Other major cryptocurrencies that had fallen sharply, including Ethereum, Ripple’s XRP and Dogecoin, also rallied, and the overall market was worth around $300 billion as traders ramped up bets on the Federal Reserve cutting interest rates next year. I have recovered.
Meanwhile, Cathie Wood, founder of hedge fund Ark Investment Management, reiterated her bullish prediction for the price of Bitcoin in an interview with Bloomberg, saying that the price of Bitcoin will exceed $1 million by 2030, and that Bitcoin will continue to grow. predicted that its market capitalization would be approximately $20 trillion. .
“(Bitcoin) is becoming even rarer than gold,” Wood said. “The difference between gold and Bitcoin is that when the price of gold increases, production increases and the rate of increase in supply increases, as it has in the past, but that cannot happen with Bitcoin. .”
In the coming weeks, Bitcoin and crypto market watchers expect Bitcoin prices to continue to trend wildly up and down.
“What happens during the holidays is that the first rule of Bitcoin is that it is always volatile, just like water is always wet,” Unity Wallet said. Chief Operating Officer James Toledano said in an emailed comment.
“Its trends are always mixed and you don’t really see any pattern from one year to the next. Sometimes prices go up in the new year, sometimes they go down. So historically, the bit “We can say that the price movement of the coin is typical. We see mixed behavior around Christmas and the New Year,” Toledano added, noting that President-elect Donald Trump’s January 20 inauguration is likely to be the start of Bitcoin and cryptocurrencies. He said it was an important day for the market to watch.
“The comments from the Fed were a wake-up call,” Danny Hewson, head of financial analysis at AJ Bell, said in an emailed comment.
“Inflation has proven to be stagnant, and tax cuts and tariffs could provide some reflationary material.” Risk appetite is subdued. Trump 2.0 is a known unknown and no one wants to be overexposed if the climate turns out to be severe. ”
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Bitcoin prices have fallen sharply after a huge rally this year. … (+)
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Meanwhile, Bitcoin price and cryptocurrency market watchers are warning of more volatility ahead.
Nick Foster, founder of decentralized finance (DeFi) protocol Derive, said: “We will see an increase in volatility levels for Ethereum and Bitcoin towards early 2025, especially around the December 27, 2025 expiry settlement. “This is expected,” he said in an emailed comment. However, he added that he expects Bitcoin prices and the broader crypto market to recover through 2025.
“We are seeing a trend of funds and high net worth individuals moving towards longer expiry options, such as those set after September, reflecting a positive outlook for 2025. This is clear from the significant outperformance,” posted Derive.xyz, suggesting strong market optimism. ”
