The Federal Reserve's anti-Bitcoin stance triggers a massive sell-off in the cryptocurrency market
An important week for the cryptocurrency market with economic calendars and Federal Reserve speeches
Today, December 19, 2024, the entire cryptocurrency market is experiencing significant losses, with major cryptocurrencies such as Bitcoin (BTC), Solana (SOL), Ethereum (ETH), and XRP seeing substantial price declines in the past 24 hours. One potential reason for this drop is the recent Federal Reserve interest rate cut meeting.
Reasons behind the decline in the cryptocurrency market
The Federal Reserve meeting minutes announced a reduction in the interest rate cap from the previous 4.75% to 4.50%, in line with expectations.
Jerome Powell made bold statements regarding cryptocurrencies, which had a significant impact on the entire market. In a statement, Powell noted that we do not allow ownership of Bitcoin and have no intention of changing the law.
This statement from the Federal Reserve Chairman indicates that the U.S. central bank has no interest or intention to support a scenario where the government holds a large amount of Bitcoin. Regarding the legal issues of Bitcoin ownership, Powell stated, "This is something for Congress to consider, but we do not wish for the Federal Reserve to change the law."
The idea of establishing a so-called "strategic Bitcoin reserve" seems to have failed, as the Federal Reserve had no intention of participating in this initiative before the election of President Donald Trump. This suggests that central banks are keeping their distance from holding large amounts of Bitcoin (unlike gold reserves).
Impact of the Federal Reserve meeting on cryptocurrency prices
Powell's statements led to a significant drop in the overall cryptocurrency market, with the world's largest cryptocurrency, Bitcoin (BTC), falling over 6.5%, briefly breaking the $108,000 mark and dropping below $100,000.
Meanwhile, the prices of other assets such as Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) fell by 5.5%, 14.20%, 9.45%, and 11.5% respectively. Furthermore, the sharp decline in cryptocurrency market prices occurred after Powell's statement.
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