Stark Fed ‘Wake-Up Call’ Triggers $500 Billion Bitcoin and Crypto Price Rout

On December 20, 2024By Littum

Bitcoin has fallen sharply, falling along with stock markets, after the Federal Reserve warned that inflation remained sticky and BlackRock spooked the market.

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The Bitcoin price has plummeted towards $90,000 per bitcoin, which has dragged down the broader crypto market, stripping roughly $500 billion of value from the $3.2 trillion crypto market.

Bitcoin’s fall of around 10% in the last 24 hours was overshadowed by ethereum and smaller, top ten cryptocurrencies – including solana and dogecoin – which plunged between 15% and 25%.

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ForbesBlackRock just quietly confirmed a devastating Bitcoin price bombBy Billy Bambrough

US Federal Reserve Chairman Jerome Powell warned that inflation will remain a problem next year, triggering a … (+) bitcoin price and crypto market sales.

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This week, Federal Reserve Chairman Jerome Powell disappointed traders when he warned that interest rates would not fall as quickly as the Fed had previously thought and reduced its planned number of cuts to just two in 2025, from four previously.

“Federal Reserve comments were a wake-up call,” Danni Hewson, AJ Bell’s head of financial analysis, said in emailed comments.

“Inflation is proving sticky and tax cuts and tariffs could be a recipe for reflation. “Risk appetite has been reduced. Trump 2.0 is a known unknown, and no one wants to be overexposed if the climate proves inhospitable.”

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ForbesFed’s ‘worst nightmare’ suddenly comes true as Bitcoin price risesBy Billy Bambrough

Bitcoin price has crashed back after its huge rally this year with the bitcoin price … (+) falls towards $90,000 and drags the rest of the crypto market down.

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Meanwhile, bitcoin price and crypto market watchers have warned of further volatility ahead.

“Expect to see volatility levels for both ethereum and bitcoin increase as we enter early 2025, particularly around the settlement of the December 27, 2025 expiration,” said Nick Forster, founder of decentralized finance (DeFi) protocol Derive , in emailed comments. but adds that he expects the bitcoin price and the broader crypto market to recover through 2025.

“We are observing a trend where funds and high net worth individuals are moving into options with longer maturities, such as those set to September and beyond, reflecting a positive outlook for 2025. This shift is evident from the open interest in calls significantly larger than puts on Derive.xyz, signaling strong market optimism.”