Bitcoin tumbles most in over three months on Jerome Powell's comment on the digital currency
2024-12-19
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Prices of Bitcoin fell by 5% - the most in over three months - tracking a broader selloff in asset classes after the Federal Reserve hinted at few rate cuts in 2025, and signalling greater caution over the interest rate trajectory. The crypto asset slipped closer to the $100,000 mark on Fed chair's hawkish tone, as well as on the comment over a potential bitcoin reserve.
When asked at the post-FOMC press conference on December 18 if US should consider such a reserve, as hinted by President-elect Trump in recent past, Fed Chair Powell said the central bank isn’t allowed to own the digital currency under current regulations, and it is not seeking a law change. "That's the kind of thing that Congress to consider, but we are not looking for a law change," said Powell.
President-elect Donald Trump has recently proposed a US Bitcoin Strategic Reserve, suggesting initiating the reserve with seized Bitcoin holdings.
Shares of bitcoin proxy MicroStrategy fell 9.5%, and bitcoin miners MARA Holdings and Riot Platforms were down between 12-14%, respectively, after Fed chair Powell's commentary. Other significant blockchain tokens like Ether, XRP and Dogecoin too struggled.
Bitcoin is higher by 50% since Donald Trump's electoral victory, hitting a record high of $108,316 this week. President-elect Trump has hinted at further deregulation of the crypto assets, which has prompted the rally, including the prospect for a strategic bitcoin reserve.Powell's comments have had a significant impact on Bitcoin's market capitalisation, triggering a major decline in an otherwise strong uptrend seen in the crypto asset following Trump's election.