Bitcoin’s worth fell to $109,000 Wednesday afternoon after Federal Reserve Chair Jerome Powell signaled that extra price cuts could not comply with in December. Since then, Bitcoin worth has leveled close to $111,000.
The drop got here shortly after the central financial institution diminished its benchmark rate of interest by 0.25 proportion factors to a goal vary of three.75%–4%.
The reduce — the Fed’s second of 2025 after a transfer in September — ended a protracted stretch of price holds. The coverage shift is meant to decrease borrowing prices and help financial exercise. However Powell’s feedback that additional cuts usually are not assured this yr sparked promoting throughout threat belongings.
Earlier than the announcement, Bitcoin traded close to $116,000 on Monday and briefly dipped under $111,000 early Tuesday. The value briefly bounced on the information earlier than sliding once more as Powell spoke. Bitcoin is at present buying and selling close to $111,200, in response to Bitcoin Journal Professional knowledge.
Through the press convention, as Jerome Powell mentioned that December’s price cuts aren’t assured, Bitcoin’s worth instantly reacted — plunging to $109,000 in a pointy purple candle earlier than shortly recovering. The broader crypto market reacted equally.
Powell mentioned that inflation excluding the affect of tariffs is “not up to now” from the central financial institution’s 2% goal, however emphasised that policymakers have “not decided about December.” Powell famous that officers held “strongly differing views” throughout as we speak’s assembly.
Following his remarks, markets sharply trimmed expectations for one more price reduce this yr. Fed funds futures now worth a 71% likelihood of a December reduce, down from about 90% earlier within the day, in response to CME knowledge and on prediction markets like Kalshi and Polymarket.
The 2-year Treasury yield jumped 9 foundation factors as merchants reassessed the Fed’s near-term trajectory.
Traditionally, Bitcoin has reacted sharply to monetary-policy modifications. After the Fed’s emergency cuts in March 2020, Bitcoin plunged almost 39% earlier than recovering. When the Fed reduce in September 2025, market response was restricted — suggesting expectations have been already priced in.
Bitcoin worth as Fed indicators finish of Quantitative Tightening
Powell additionally mentioned the central financial institution is approaching the top of its Quantitative Tightening program, confirming the Fed expects to cease QT by December. This entails letting some holdings of Treasuries and mortgage securities run off the steadiness sheet as they mature, fairly than reinvesting the principal.
QT reduces liquidity by shrinking the Fed’s steadiness sheet by way of permitting authorities bonds to mature with out reinvestment or by promoting them into the market.
The method has been underway since 2022, eradicating almost $1 trillion in securities as a part of efforts to combat inflation.
Ending QT would cease that drain on liquidity — a shift many analysts consider might ultimately help flows into threat belongings, together with Bitcoin.
Powell warned, nevertheless, that coverage will stay depending on financial knowledge, including additional uncertainty to market expectations.
