Fed’s screaming ‘wake-up call’ launches $500 billion in Bitcoin and cryptocurrency prices

Bitcoin fell sharply, falling along with stock markets after the Federal Reserve warned that inflation remains flat BlackRock has spooked the market.

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Bitcoin’s price fell about $90,000 per bitcoin, dragging down the broader cryptocurrency market and wiping out about $500 billion worth of the $3.2 trillion cryptocurrency market.

Bitcoin’s decline of about 10% over the past 24 hours was dwarfed by Ethereum and smaller top 10 coins — including Solana and Dogecoin — which again collapsed by between 15% and 25%.

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ForbesBlackRock quietly confirmed a devastating bombshell for Bitcoin pricesby Billy Bambrough

This week, Federal Reserve Chair Jerome Powell disappointed traders when he warned that interest rates would not fall as quickly as the Fed previously thought, cutting the number of planned cuts to just two in 2025, from four previously.

“The Fed’s comments were a wake-up call,” Danny Hewson, head of financial analysis at AJ Bell, said in email comments.

“Inflation has proven flat, and tax cuts and tariffs may be a recipe for recovery. Risk appetite has subsided. Trump 2.0 is a known unknown and no one wants to be overly exposed if the climate proves inhospitable.”

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ForbesThe Fed’s “biggest nightmare” suddenly became reality as Bitcoin prices soaredby Billy Bambrough

Meanwhile, Bitcoin price and cryptocurrency market watchers have warned of more volatility ahead.

“We expect to see increased volatility levels for both Ethereum and Bitcoin as we head into early 2025, particularly around the expiry settlement on December 27, 2025,” Nick Forrester, founder of decentralized finance (DeFi) protocol Derive, said in email comments. But he added that he expects the price of Bitcoin and the broader cryptocurrency market to recover until 2025.

“We are observing a trend where funds and high-net-worth individuals are moving to options with longer expirations, such as those set for September onwards, reflecting a positive outlook for 2025. This shift from open interest is evident in calls that significantly outnumber puts Derive.xyz , which indicates strong optimism in the market.