The central bank surprised with much less optimistic forecasts than expected.
The correction in the cryptocurrency market is total. Bitcoin (BTC) has lost more than $10,000 in value since the highs marked on the 17th of last Tuesday. At the same time, the market has lost 7% of its market capitalization in the last 24 hours. Are there reasons for concern?
The reality is that the market is unclear. Some strategists point out that bitcoin and cryptocurrencies' reaction to the latest monetary policy decision by the Federal Reserve (Fed) underscores bitcoin's vulnerability to external factors. It is worth noting that the U.S. central bank has recently lowered interest rates but announced that it will lower them fewer times than expected in 2025 and that its projections for next year are less optimistic: inflation will rise due to greater economic growth and lower unemployment.
According to numerous experts, this 'hawkish' stance of the central bank arises in anticipation of the effects that the policies of elected President Donald Trump may have in the United States – who today, by the way, has promised to raise tariffs on Europe.
Others, however, highlight that the recent declines present an interesting buying opportunity, as they expect digital assets to shine next year. Much of this optimism is precisely due to Trump. The elected president has shown himself to be very favorable to cryptocurrencies and has promised to enact laws that favor these digital assets, as well as ambitious initiatives such as the creation of a strategic reserve of bitcoins.
But Trump's plans do not convince everyone. "While the impact of Trump's policies remains speculative, weak demand from European economies and China is likely to limit global growth (and inflation). At the same time, a stronger U.S. dollar could affect corporate earnings of U.S. companies," explain the strategists at 10x Research.
A significant part of the recent market rises is related to Trump, whose electoral victory and subsequent statements have spurred the rally in the cryptocurrency market. The figure of the elected President of the United States has provided a "fundamental support" for this class of assets, and, according to XTB, it will continue to do so in the future.
Hani Abuagla, senior market analyst at XTB MENA, points out that despite price volatility, the flows recorded by the BTC exchange-traded funds (ETFs) "remain strongly positive." While over $600 million in net outflows have been recorded in the last day, this expert highlights that in the last 20 days, net inflows amount to nearly $7 billion, suggesting a "sustained" institutional appetite and that the market is "maturing" alongside BlackRock (IBIT) and Fidelity (FBTC) funds.
"Although short-term volatility may persist as markets digest the Fed's political trajectory, the structural demand coming from ETFs and the potential regulatory clarity under a Trump administration could provide support. The interaction between monetary policy, institutional adoption, and political developments suggests that bitcoin will continue to be sensitive to both macroeconomic and crypto-specific catalysts throughout 2025," explains this expert.
In this sense, Bitwise strategists are much more optimistic. Looking ahead to the next 12 months, these experts predict that bitcoin will reach $200,000 and that major companies in the sector, such as Circle and Kraken, will make their leap to the stock market. Bitwise also predicts that the 'stablecoin' market could double to $400 billion if the anticipated 'stablecoin' law is passed in the United States.