- Federal Reserve’s third rate cut triggers crypto market decline, with Bitcoin falling to $97,000 from $108,135.
- Spot Bitcoin ETFs experienced record $671.9 million single-day outflows on December 18.
- Bitcoin ETF assets reach $129 billion, surpassing Gold ETF holdings of $128 billion.
- Ether price drops 20% from pre-Fed meeting high of $4,100.
- Trump’s election victory contributes to 45% Bitcoin Price increase since November 5.
Crypto Markets Retreat as Fed Signals Limited Rate Cuts for 2025
Cryptocurrency markets faced substantial selling pressure following the Federal Reserve’s December 18 meeting, where officials announced their third interest rate reduction while indicating a more conservative approach to future cuts than markets anticipated.
Market Impact
Bitcoin retreated to $97,000, marking a significant decline from its recent peak of $108,135. The cryptocurrency remains bullish on a longer timeframe, maintaining a 45% gain since the November presidential election, supported by President-elect Trump’s proposed national bitcoin reserve initiative.
Other major cryptocurrencies experienced steeper declines, with Ether dropping 13%, Solana declining 15%, and XRP falling 8%. The market reaction reflects investor concerns about the Fed’s projection of only two rate cuts in 2025, as inflation concerns persist.
ETF Market Dynamics
Spot Bitcoin ETFs recorded their largest outflow since inception, with investors withdrawing $671.9 million on Thursday, according to Farside Investors. Leading the Exodus was Fidelity’s FBTC with $208.5 million in outflows, while Grayscale’s GBTC saw $188.6 million exit.
Despite the recent outflows, Bitcoin ETFs achieved a significant milestone by accumulating $129 billion in assets under management, narrowly exceeding gold ETFs at $128 billion, as reported by K33 Research.
The Ether ETF market also experienced turbulence, with $60.5 million in net outflows marking the first negative flow day since November 21. The broader market correction has pushed Ether prices down 20% from their pre-Fed meeting level of $4,100.
Recent industry developments suggest continued volatility, with major news outlets facing restructuring and Initial Coin Offerings returning to the market amid the current bull cycle.
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