Bitcoin fell on Wednesday, but the price of Bitcoin did not fluctuate much after the Federal Reserve hinted at a gradual rate cut this year.
Author: Mat Di Salvo
Source: Decrypt
Translated by: Ada, MetaEra
After the Federal Reserve released the minutes of its December meeting, Bitcoin and other major crypto assets did not see significant volatility on Wednesday. However, the Federal Reserve hinted that with the incoming President Donald Trump, inflation could be more severe than expected.
The minutes released by the US central bank on Wednesday stated that the "potential changes in trade and immigration policies" could keep the inflation rate above the 2% target.
The agency officials said they would be more cautious in lowering borrowing costs by 2025.
According to CoinGecko, the current Bitcoin price is around $93,800. In the past 24 hours, its price has fallen by more than 3%, but most of the decline occurred before the release of the Federal Reserve meeting minutes.
The seventh-largest cryptocurrency Dogecoin fell more than 4% in 24 hours, trading at $0.337, while major cryptocurrencies Ethereum and Solana fell 4% and 5% respectively.
The US stock market also remained largely stable. Traders are now waiting for more information on Friday, when new employment data will be released.
Although President-elect Trump has claimed he will help ordinary Americans save money, the future commander-in-chief is keen on trade tariffs, and some economists suggest this could lead to an exacerbation of inflation. However, The Washington Post reported this week that his team is considering even stricter tariffs than originally planned - a claim Trump himself later denied.
Bitcoin and other high-risk assets like tech stocks have largely benefited from low interest rates. With lower borrowing costs, investors are more likely to invest in assets with greater price volatility.
The US central bank is set to raise rates significantly in 2022 to curb post-pandemic inflation. Therefore, Bitcoin received a boost when the Federal Reserve finally cut rates in September.
In December, Bitcoin hit a new all-time high of over $108,000 per coin. Like stocks, Bitcoin also soared after Trump's November election victory, as the new president has positioned himself as a Bitcoin-friendly leader who will help the digital asset industry and relax Wall Street regulations.
