The Federal Reserve’s hawkish signal led to a continued decline in the cryptocurrency market.
On December 20, market data showed that as of 18:15, the price of Bitcoin (BTC) fell to around US$94,500, a 24-hour drop of more than 6%; the price of Ethereum (ETH) once fell below US$3,200, a 24-hour drop of more than 10%; the price of SOL fell to around US$180, a 24-hour drop of more than 12%; the price of Dogecoin (DOGE) fell to around US$0.255, a 24-hour drop of more than 19%.
As mainstream cryptocurrencies fell, “altcoins” also “bleeding like a river” and plummeted overall.
Coinglass data shows that in the past 24 hours, more than 372,900 people had their positions liquidated, with a total liquidation amount of approximately US$1.219 billion, of which US$1.06 billion were long positions liquidated and US$160 million were short positions liquidated.
In the early morning of December 19th, Beijing time, the Federal Reserve announced that it would lower the target range of the federal funds rate by 25 basis points to 4.25%-4.5%, in line with market expectations. Prior to this, the Federal Reserve had cut interest rates twice in September and November, with a total rate cut of 75 basis points.
Fed Chairman Powell said at a press conference that after this rate cut, the Fed's threshold for further rate cuts may be higher. At present, the policy rate has been lowered by one percentage point from the peak, and the restrictiveness of the policy stance has been significantly reduced. Therefore, the Fed can be more cautious when considering further adjustments to the policy rate.
At the same time, Powell also said that the Fed does not intend to include Bitcoin in its balance sheet. "We are not allowed to own Bitcoin." Powell said that the (Federal Reserve Act) stipulates what the Federal Reserve can own, and the Federal Reserve does not seek to change it; this is a question that Congress should consider, but the Federal Reserve does not want to amend the law.
Previously, US President-elect Trump said he planned to make the United States the "cryptocurrency capital of the earth."