The price of Bitcoin briefly slipped below the $100,000 mark on Wednesday, plunging to as low as $98,839, according to CoinGecko data.
This came after the U.S. Federal Reserve indicated that it would substantially scale back easing in 2025.
As reported by U.Today, the Fed, as expected, implemented a 25-basis point rate cut. However, the Fed's revised dot plot, a chart that shows individual members' projections for rates, moved up by 50 basis points. This was a big surprise for the market, which previously anticipated 100 basis points in cuts in 2025.
Due to the Fed's hawkish about-face, both the 10-year U.S. Treasury yield and the U.S. dollar spiked sharply higher, while cryptocurrencies and stocks took a severe beating.
The Fed will now be more cautious about further rate cuts, and only two of them are now projected to be implemented in 2025.
"It's not unlike driving on a foggy night or walking into a dark room full of furniture. You just slow down," Fed Chair Jerome Powell said during his press conference.
Bitcoin is currently trading at $101,252 after paring some losses. More than $802 million worth of crypto has been liquidated over the past 24 hours.
The cryptocurrency plunged in tandem with major equity market indices. For instance, the Dow Jones Industrial Average (DJIA) recorded a 10-day losing streak for the first time since in 50 years. The S&P 500 index also recorded its largest post-Fed plunge since March 2020.
"The Fed now projects 2.5% inflation in 2025. And only 2 interest rate cuts. It's a big signal that Fed now sees a much harder path to a complete victory over inflation (back to 2%)," Heather Long, an economic columnist for The Washingon Post, wrote on social media.
Dan Burgin
Vladislav Sopov