Today, December 19, 2024, the overall cryptocurrency market is experiencing notable losses, with major cryptocurrencies like Bitcoin (BTC), Solana (SOL), Ethereum (ETH), and XRP seeing significant price declines over the past 24 hours. A potential reason for this drop is the recent Federal Reserve rate cut meeting.
Reason Behind the Crypto Market Decline
During the conference, the Federal Reserve announced an interest rate ceiling of 4.50%, aligning with expectations, compared to the previous rate of 4.75%.
Jerome Powell made a bold statement on cryptocurrency that significantly impacted the overall market. In a statement, Powell noted that we are not allowed to own Bitcoin and have no desire to change the laws.
This statement by the Fed chief shows that the U.S. central bank has no interest or intention to support a scenario where the government would accumulate a significant amount of Bitcoin. Regarding the legal issues surrounding Bitcoin ownership, Powell stated, “That’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed.”
The idea of creating a so-called “Strategic Bitcoin Reserve” appears to be failing, as the Federal Reserve has no intention of participating in such an initiative until President-elect Donald Trump takes office. This indicates that central banks are distancing themselves from holding large amounts of Bitcoin, unlike gold reserves.
Federal Reserve’s Meeting Impacted Crypto Prices
These statements by Powell have caused a significant downturn in the overall cryptocurrency market. Bitcoin (BTC), the world’s largest cryptocurrency, dropped by over 6.5%, falling below $100,000 after reaching the $108,000 mark.
Meanwhile, other assets, including Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE), experienced price declines of 5.5%, 14.20%, 9.45%, and 11.5%, respectively. Additionally, this notable price decline in the crypto market occurred following Powell’s statement.
