The crypto and global stock markets have just experienced a shock after the U.S. Federal Reserve's (Fed) decision to cut interest rates by 25 basis points on Wednesday. Although this move was anticipated, signals indicating that interest rates will remain high for a long time have put significant pressure on the market.
Shock from the Fed and Market Reaction
• Bitcoin drops sharply: Following Chairman #Fed Jerome Powell's speech, Bitcoin lost 5% of its value, dropping to 100,000 USD.
• Stocks plummeted: #Nasdaq fell 3.6%, S&P 500 nearly dropped 3%, while Dow Jones lost 2.6%.
The Fed emphasized that although inflation has cooled, the rate of decline is 'slower than expected.' According to the latest 'dot plot' chart, the Fed only plans to reduce interest rates twice in 2025, lower than previous expectations.
Bitcoin Still Has Great Potential Despite Market Volatility
Despite the market temporarily declining, experts believe this is just a 'setback to move forward.' Ryan McMillin, Chief Investment Officer at Merkle Tree Capital, commented:
• This is just a short-term correction: The market is still in an uptrend, and 20% price drops are normal during a bull run.
• Buying in is an opportunity: 'I see no reason to think that the bull cycle has ended,' McMillin emphasized.
Pratik Kala, Head of Research at Apollo Crypto, also believes the market will recover quickly: 'Expect higher prices next week.'
Trump and Crypto Policy: Long-Term Good News
The inauguration of President-elect Donald Trump in January 2025 is also expected to bring many benefits to the crypto market:
• Commitment to crypto development: #TRUMP promises to protect the interests of the Bitcoin mining industry, establish a reserve fund $BTC , and make the U.S. the world's 'crypto capital.'
• Positive legal environment: Building clear policies will help the crypto industry develop more sustainably.
Additionally, the event #microstrategy joining Nasdaq 100 is seen as a major driver, paving the way for passive capital to flow into the market through ETF funds.
Conclusion
Despite the Fed being cautious, long-term factors like Trump's crypto support policies, a strong economic environment, and new ETF funds will create conditions for Bitcoin and the crypto market to continue to break through. This could be a golden opportunity for investors to seize the market's recovery trend.