Cryptocurrency markets collapsed after an epic rally, taking Bitcoin back below $100,000

Bitcoin and the broader cryptocurrency market fell on Friday as investors dumped digital assets after the Federal Reserve said it would make smaller interest rate cuts in 2025 than expected.

After reaching Highest level ever From $108,000 earlier this week, Bitcoin has fallen over the past 24 hours to a low of $92,000. Smaller cryptocurrencies including Ethereum Solana also took a big hit.

As a further indicator of pessimism about cryptocurrencies, bitcoin exchange-traded funds — a group of financial assets that track the price of bitcoin — saw record outflows, losing $680 million in the last day, according to SoSoValue data.

said Brian Ruddick, head of research at market maker GSR luck Concerns about tariff policies proposed by President-elect Donald Trump leading to increased inflation have left the cryptocurrency market vulnerable to the sell-off sparked by the recent Federal Reserve meeting.

“The big catalyst was the Fed,” Roddick said.

On Wednesday, the Fed Announce It will cut interest rates for the third time this year. While interest rate cuts have previously been a boon for digital assets, the Fed has also revised the number of interest rate cuts it expects to make in 2025 from four to two, citing concerns about still-high inflation. This led to investors dumping risky assets and cashing out gains before the end of the year, leading to the biggest sell-off since the November election.

However, Ruddick says he does not see this deflation continuing and that if Trump continues to deliver on his campaign promises on cryptocurrencies, such as creating a federal reserve for Bitcoin, prices will continue to rise.

“I view this as a healthy correction in the trajectory leading to an eventual move much higher from here,” he said.

Bitcoin and the rest of the cryptocurrency market have been on a tear since Trump secured a second term on November 5. His victory marked a change in regulatory policy to be more favorable to cryptocurrencies, which led to the original cryptocurrency rising to $100,000, which was achieved on December 5.

Although Trump has not yet taken office, a tangible shift toward cryptocurrency-friendly regulation has already occurred. Since the election, anti-crypto Securities and Exchange Commission Chairman Gary Gensler has announced his resignation and Trump has chosen a number of crypto advocates to head government departments, helping to push the cryptocurrency market higher.

This story originally appeared on Fortune.com