The crypto market declined after The Federal Reserve set a new interest rate ceiling at 4.50%, aligning with expectations but lower than the previous 4.75%. Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP, faced significant losses today, December 19, 2024. Bitcoin dropped by over 6.5%, falling below $100,000 from a recent high of $108,000. Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) also experienced sharp declines, down by 5.5%, 14.20%, 9.45%, and 11.5%, respectively.
- Federal Reserve’s Announcement:
- The Federal Reserve set a new interest rate ceiling at 4.50%, aligning with expectations but lower than the previous 4.75%.
- Jerome Powell, Fed Chairman, made a critical statement about cryptocurrency ownership, clarifying that the Fed has no interest in holding Bitcoin and no plans to advocate for a change in current laws prohibiting federal Bitcoin reserves.
- Impact of Powell’s Statement:
- Powell’s comments highlighted the Fed’s disinterest in supporting the creation of a “Strategic Bitcoin Reserve,” a proposal gaining traction in some circles.
- The lack of central bank support contrasts with Bitcoin’s appeal as a decentralized alternative and highlights continued regulatory uncertainty.
- Market Sentiment:
- The Federal Reserve’s position has caused a ripple effect, with investor sentiment turning bearish.
- The crypto market’s sharp decline reflects uncertainty about future U.S. policy on Bitcoin and other cryptocurrencies, especially before President-elect Donald Trump takes office.
The Federal Reserve’s firm stance against accumulating Bitcoin reserves and the broader implications for cryptocurrency regulation has dealt a blow to market sentiment. As central banks distance themselves from crypto assets, the market faces increasing challenges, compounded by ongoing volatility and regulatory uncertainty. Eyes are now on the incoming administration and how it will shape the narrative around cryptocurrencies
