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Crypto Markets Lose $1.25 Billion as Fed Warns of Higher Inflation in 2025

Crypto Markets Lose $1.25 Billion as Fed Warns of Higher Inflation in 2025

CoinEditionCoinEdition2024/12/19 16:00
By:Ikemefula Aruogu

The cryptocurrency market lost nearly $1.25 billion on Thursday. Fed chair Jerome Powell announced hawkish predictions for 2025. Analysts believe the crypto market pullback is temporary.

  • The cryptocurrency market lost nearly $1.25 billion on Thursday.
  • Fed chair Jerome Powell announced hawkish predictions for 2025.
  • Analysts believe the crypto market pullback is temporary.

The cryptocurrency market lost nearly $1.25 billion on Thursday following a hawkish statement from the U.S. Federal Reserve after the latest Federal Open Market Committee (FOMC) meeting. Fed chair Jerome Powell announced a 25 basis point rate cut, which should be positive for the digital assets market. However, things turned out differently because of Powell’s 2025 predictions .

According to Powell, the Federal Reserve predicts higher inflation and only two interest rate cuts next year. The Fed chair’s follow-up statement shocked the crypto market, leading to massive declines in cryptocurrency prices. Bitcoin crashed over 7% in less than 24 hours to drop below $96,000.

Crypto Liquidations and Price Declines

Coinglass data shows Bitcoin’s liquidation was over $45 million. Ethereum, the second-largest cryptocurrency by market capitalization, had nearly $30 million in liquidation. Most top cryptocurrencies fell after the Fed’s hawkish statement. Dogecoin, the flagship meme coin, had an 18% price correction, XRP’s price fell by 11%, and Solana fell by 11.7%.

Thursday’s crypto market crash made crypto community members react. Many retailers said they fear the bull run might be over. But the stronger crypto supporters said the crash is a temporary pullback that is normal in the crypto market bull cycle. Most supporters believe the price will go up again before the end of the year.

Bitcoin’s Performance and Industry Developments

Despite the crash, Bitcoin is up 130% this year. Many analysts say the developments in the crypto industry are more important than macroeconomic factors like the Fed’s statement. The analysts believe the pullback is temporary and will lead to more bullish movements.

Read also: FOMC’s Projections Hammer Altcoins, Bitcoin Drops to $100K

One notable development is MicroStrategy’s Bitcoin acquisition . The investment firm has been buying Bitcoin since November. The firm, which holds nearly 2% of Bitcoin’s supply, paid about $3 billion for Bitcoins in December, when the cryptocurrency was over $100,000.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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