Bitcoin and the rest of the cryptocurrency market had a rough start to the year as fears rose that the Federal Reserve might be nearing its last interest rate cut. According to Bloomberg’s report , on Monday, Bitcoin briefly dipped below $90,000. Its biggest fall since January 1, down nearly 5% for the month ahead of Monday’s recovery. Other cryptocurrencies, such as Ether, are also still suffering to make gains for the month. The report revealed that the crypto meltdown is a result of uncertainty around the Federal Reserve policy changes. Investors believe that the Fed is closing its window for further interest rate cuts. In the last Federal Open Market Committee (FOMC) meeting, Jerome Powel, the chair of the Federal Reserve, announced that the U.S. central bank will adopt a more hawkish stance moving forward following increased risks of a possible rise in inflation. Barchart, a financial markets trading and investing tool provider, reported that there is a less than 5% chance that the Fed will cut rates this month and a 95% chance of maintaining the current rate range of 4.25%- 4.5%. Fewer rate cuts mean reduced liquidity and investor appetite for risk assets such as digital assets. Source: Bloomberg The excitement about crypto is still there despite soaring treasury yields Investors are wagering on the possibility of a longer break before any federal reserve rate changes , stimulated by a robust U.S. economy and bullish monetary policy coming from the cabinet of U.S. President-Elect Donald Trump. While soaring Treasury yields have dampened some of the enthusiasm around digital currencies, many people in the space are still optimistic. This is primarily due to Trump’s pledges to make the U.S. a crypto-friendly country and reverse the regulations from the Biden era. Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap
