Federal Reserve’s Anti-Bitcoin Stance Causes Major Sell-off in Crypto Market
On December 19, 2024, major cryptocurrencies such as Bitcoin, Ethereum, and others experienced significant price declines following the Federal Reserve’s announcements regarding interest rates and a firm stance against Bitcoin ownership, leading to a sell-off in the crypto market.
On December 19, 2024, the cryptocurrency market faced considerable setbacks, with major currencies such as Bitcoin (BTC), Solana (SOL), Ethereum (ETH), and XRP witnessing significant declines in their values within a 24-hour period. This downturn can be attributed to the recent Federal Reserve rate cut meeting, where the central bank announced an interest rate ceiling of 4.50%, down from 4.75%, thus aligning with expectations.
Federal Reserve Chairman Jerome Powell made a noteworthy pronouncement regarding cryptocurrencies, stating that the Fed has no inclination to support the ownership of Bitcoin. Specifically, Powell clarified, “We are not allowed to own Bitcoin and have no desire to change the laws.” This stark position reflects the Fed’s stance against accumulating Bitcoin, signaling a lack of governmental interest in establishing a significant holding in digital currencies, in contrast to traditional assets like gold.
This position further underscores the Fed’s reluctance to engage in the concept of a “Strategic Bitcoin Reserve” until there is a change in leadership, specifically until President-elect Donald Trump assumes office.
Consequently, these declarations have profoundly affected the cryptocurrency market. Bitcoin, the largest cryptocurrency by market capitalization, fell by over 6.5%, dipping below $100,000 after recently surpassing the $108,000 threshold. Other cryptocurrencies, including Ethereum, XRP, Solana, and Dogecoin, also suffered notable downturns, with declines of 5.5%, 14.20%, 9.45%, and 11.5%, respectively, following Powell’s statements.
The public’s response to the Federal Reserve’s stance on cryptocurrencies is significant, as it reflects broader implications for the regulatory landscape surrounding digital assets. The Fed’s decisions are closely monitored due to their potential influence on market trends and investor confidence. Jerome Powell’s remarks about Bitcoin ownership highlight the regulatory challenges and the ongoing debates surrounding digital currency governance, as the central bank appears to prioritize traditional financial frameworks over the cryptocurrency ecosystem. This reinforces the perception that government institutions may be hesitant to embrace Bitcoin as an acceptable asset class.
In conclusion, the Federal Reserve’s recent statements regarding Bitcoin and interest rates have contributed to a pronounced decline in the cryptocurrency market. The Fed’s stance, particularly Jerome Powell’s assertion regarding the impossibility of owning Bitcoin, has left investors wary and resulted in substantial price drops across major cryptocurrencies. As regulatory clarity continues to evolve, the responses from institutions such as the Federal Reserve will play a crucial role in shaping the future of digital assets.
Original Source: coinpedia.org
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