- The Fed Chair Powell announced a rate cut to 4.50%, indicating two quarter-point rate cuts for next year.
- Powell confirmed that the Fed is not allowed to own Bitcoin and has no plans to change the law.
- Bitcoin dropped below $100K after Powell’s comments about the central bank’s stance on BTC.
Today, the global crypto market is flooding with bloodbath as Bitcoin (BTC) has seen a major shake-up, dropping to the $98K zone. This downturn comes after Federal Reserve Chair Jerome Powell stated that the Fed is “not allowed to own Bitcoin” and ruled out any plans to change the laws regarding cryptocurrency ownership. He also signals a more cautious approach to the Fed rate cuts in 2025.
Fed Chair Jerome Powell asked about a US Strategic Bitcoin Reserve: Fed can't own it
He says, "We're not allowed to own Bitcoin … We are not looking for a law change at the Fed."#Bitcoin #FED #JeromePowell #USA pic.twitter.com/EwmLeiln9U
— TheNewsCrypto (@The_NewsCrypto) December 19, 2024
Powell further emphasized, “That’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed.” He also dismissed the idea of adding Bitcoin to the central bank’s reserves, dampening hopes of greater institutional adoption of the cryptocurrency.
Powell’s comments, made during a press conference on Wednesday after the Federal Reserve announced a new interest rate ceiling of 4.50%, sent shockwaves through the market. While the rate cut aligns with expectations, Powell hinted that future cuts would depend on significant progress in reducing inflation—U.S. central bankers anticipated a higher inflation outlook and fewer rate cuts next year.
Adding to the complexity, Trump has expressed strong support for cryptocurrencies. In July, Trump promised to make the United States the “crypto capital of the planet.”
Crypto Market Reacts to Powell’s Comments
While President-elect Donald Trump’s pro-crypto stance promised a friendlier approach, Powell’s remarks dampened investor confidence. This led to Bitcoin dropping over 6% to an intraday low of $98,792.
The broader market was not spared. Major cryptocurrencies like Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) posted losses of 9.21%, 15.5%, 8.35%, and 12.26%, respectively. The total market value slid by 4%, bringing it down to $3.5 trillion.
The downturn also resulted in heavy liquidations. In the past 24 hours, 282,118 traders liquidated positions worth $813.87 million. Despite the turmoil, Bitcoin showed some recovery, climbing back above $101,000. It had hit a record high of $108,000 earlier this week.
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