Bitcoin’s value has dropped sharply, falling to $90,000 per coin as the Federal Reserve warned that inflation remains sticky. This move has led to a broader crypto market downturn, wiping out around $500 billion in value from the overall $3.2 trillion market.
In the last 24 hours, bitcoin fell by around 10%, with some top cryptocurrencies such as ethereum and solana experiencing even steeper declines of up to 25%. The wider crypto market is now facing increased volatility ahead, particularly with key settlement dates approaching.
Federal Reserve Chair Jerome Powell’s warning on interest rates has also raised concerns. “Comments from the Federal Reserve were a wake-up call,” said Danni Hewson, head of financial analysis at AJ Bell. She believes that inflation remains sticky and that tax cuts and tariffs could lead to reflation.
However, experts like Nick Forster, founder of Derive, note that while volatility is expected to increase in the coming months, the market is likely to recover by 2025. They point to a trend where high net-worth individuals are moving into options with longer expiries, indicating a positive outlook for the year ahead.
Source: https://www.forbes.com/sites/digital-assets/2024/12/20/stark-fed-wake-up-call-triggers-500-billion-bitcoin-and-crypto-price-rout