The cryptocurrency market stumbled into 2025 with a shaky start as Bitcoin briefly dropped below $90,000, its sharpest decline since the beginning of the year.
The downturn is linked to uncertainty surrounding the Federal Reserve’s monetary policy and fears of reduced liquidity.
Market jitters intensified after Federal Reserve Chair Jerome Powell hinted at adopting a more hawkish stance due to rising inflation risks. Speculation about a halt in interest rate cuts has dampened investor sentiment, with Barchart estimating a 95% chance that current rates of 4.25%-4.5% will hold steady. This uncertainty has weighed heavily on digital assets, curbing risk appetite across the board.
Bitcoin, currently trading at $94,822, has seen a 6.8% decline over the past week and a 12.3% drop from its December 2024 peak of around $108,000. Despite this, President-elect Donald Trump’s pro-crypto agenda, including plans for a national Bitcoin reserve, has fueled optimism. Trump’s inauguration on January 20 is viewed as a potential turning point for the market.
Major players in the crypto space remain confident. MicroStrategy, for instance, recently added 2,530 BTC to its reserves, bringing its total holdings to 450,000 BTC valued at $42.74 billion. Meanwhile, experts like Alice Liu from CoinMarketCap predict the market will recover, with 2025 marking a significant year for crypto adoption.
While technical analysts warn of potential downside risks with Bitcoin’s next support level at $87,500, the overall sentiment suggests that the market’s long-term trajectory remains bullish. Investors are cautiously navigating current challenges, anticipating a rebound as regulatory and economic conditions evolve.
Binance.US has reinstated USD deposits and withdrawals, marking a return to traditional banking services after an 18-month pause.
Binance CEO Richard Teng is hopeful that the crypto regulatory landscape in the U.S. will shift in a favorable direction with the new administration under President Donald Trump.
The collapse of Argentina’s Libra token has reignited debates over the need for stronger regulatory frameworks around memecoins.
Stablecoins, which are pegged to the US dollar, may become pivotal in reinforcing the dollar’s global dominance, according to recent insights from the Atlantic Council.