The cryptocurrency market has seen a major setback following the Federal Reserve’s (Fed) latest announcement on its monetary policy. Bitcoin, the leading cryptocurrency, plummeted by 4.6%, while Ether suffered an even bigger drop of 5.96%, after Fed Chair Jerome Powell noted that fewer rate cuts than initially anticipated are expected in 2025.
While the 25 basis point cut in the reference rate was already anticipated, generating some euphoria among traders, Powell's statements about the possibility of only two additional cuts in 2025 injected a strong feeling of uncertainty into the market.
But that's not all. The Fed also revised up its inflation outlook for 2025, raising it from 2.1% to 2.5%. This increase in inflation expectations has been interpreted by many traders as a bearish signal, generating a wave of selling in the cryptocurrency market.
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