Bitcoin fell below $100,000 on Wednesday night, down 6% in 24 hours and trading at $99,047.7, following comments from U.S. Federal Reserve Chairman Jerome Powell.
Powell dismissed the idea of the U.S. establishing a national Bitcoin reserve fund, stating that the central bank 'is not seeking a change in the law' and is not permitted to hold Bitcoin. This led to a sharp correction after Bitcoin surged to a new all-time high of $108,000 earlier this week.
The impact was felt across the market, with major altcoins also seeing significant losses. Ethereum (ETH) fell 6.5% and XRP dropped 12.64%. The GMCI 30 index, which tracks the performance of top cryptocurrencies, declined 7.18% in the past day.
The recent price surge of Bitcoin was driven by comments from U.S. President-elect Donald Trump regarding the creation of a national Bitcoin reserve fund. Several states, including Texas and Florida, have also seen efforts to build state-backed Bitcoin reserve funds, boosting market optimism.
Despite the retreat in the cryptocurrency market, Powell's comments are just part of a larger economic picture. The decision by the U.S. Federal Reserve to cut interest rates by 25 basis points on Wednesday, while signaling fewer cuts in 2024, contributed to the market decline.
With the ongoing instability, many are closely watching how the market reacts to political and economic changes in the coming months.
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