Bitcoin and the broader cryptocurrency market have had a shaky start to the year, hurt by speculation that the Fed’s buffer for further rate cuts is closing.
The digital asset briefly dipped below $90,000 on Monday – down almost 5% since the start of 2025 – before recovering. Smaller tokens like Ether have been losing for the month so far.
Investors are rallying around the prospect of an extended Fed interest rate pause amid U.S. economic resilience and risks from the inflationary tariffs and immigration policies of President-elect Donald Trump, who will be sworn in next week.
As a result, Treasury yields rose, cooling some of the fervor for crypto fueled by Trump’s promise to make the US the global capital of digital assets by creating friendlier regulations and rolling back the Biden administration’s crackdown.
Traders also shed stocks as a selloff in government bonds rocked global markets. The S&P 500 index, for example, erased much of the gain caused by Trump’s November 5 election victory, SEEbiz reports.
Higher bond yields and the strength of the dollar “have put significant pressure on risk assets,” said Richard Galvin, co-founder of hedge fund DACM. At the same time, “Trump may issue crypto-specific executive orders as some of his first actions after inauguration,” he said.
Bitcoin, which reached a record high of $108,316 last month, was at levels around $94,800 this morning. The token’s progress since election day has slowed to roughly 40%.
Many in the crypto community remain optimistic about a sustained boom under Trump. Bitcoin Accumulator MicroStrategy Inc. just reported its 10th consecutive weekly purchase of crypto assets, bringing its holdings to around $41 billion.
For now, the biggest digital asset remains in a “correction phase,” according to Fairlead Strategies LLC technical analyst Katie Stockton. Chart trends point to the possibility of a test of support “down” at $87,500, she said.
Investors pulled about $1.6 billion net from U.S. spot-Bitcoin exchange-traded funds over the past four trading days, data compiled by Bloomberg show.
(Vijesti.ba)
