Bitcoin fell on Wednesday, but prices did not fluctuate much after the Federal Reserve signaled it would slowly cut interest rates this year.
Article written by: Mat Di Salvo
Source: Decrypt
Article compiled by: Ada, MetaEra
Bitcoin and other major crypto assets did not move much on Wednesday after the Federal Reserve released the minutes of its December meeting. However, the Fed hinted that inflation could be more severe than expected with the inauguration of new President Donald Trump.
Minutes from the U.S. central bank’s meeting released on Wednesday noted that “the impact of potential changes in trade and immigration policies” could keep inflation above its 2% target.
Agency officials stated they will be more cautious in lowering borrowing costs in 2025.
According to CoinGecko, the current price of Bitcoin is approximately $93,800. In the past 24 hours, its price has dropped by more than 3%, but most of the decline occurred before the release of the Federal Reserve's meeting minutes.
The seventh largest cryptocurrency Dogecoin has fallen more than 4% in 24 hours, trading at $0.337, while major cryptocurrencies Ethereum and Solana are currently down 4% and 5%, respectively.
The US stock market has also remained fairly stable. Traders are now waiting for more information on Friday when new employment data is expected to show a decline.
Despite elected President Trump claiming he will help ordinary Americans save money, this future Commander-in-Chief is keen on trade tariffs, with some economists suggesting this could lead to increased inflation. However, The Washington Post reported this week that his team is considering stricter tariffs than originally planned—Trump himself later denied this claim.
Riskier assets like Bitcoin and tech stocks largely benefit from low interest rates. With lower borrowing costs, investors are more likely to put money into assets with greater price volatility.
The US central bank raised interest rates significantly in 2022 in an effort to curb inflation following the COVID pandemic. Therefore, when the Federal Reserve finally cut rates in September, Bitcoin was boosted.
In December, Bitcoin reached an all-time high of over $108,000 per coin. Like stocks, Bitcoin surged due to Trump’s election victory in November, as the newly elected president positioned himself as a Bitcoin-friendly leader who would support the digital asset industry and relax regulations on Wall Street.
