Bitcoin Plunges Over 4% Amid Fed Signals and Trump’s Tariff Moves
Bitcoin saw a significant drop of over 4% on Thursday, falling as low as $106,290, as cryptocurrency traders reacted to mixed signals from both the Federal Reserve and President Donald Trump. The crypto market appears increasingly nervous about the future.
After hitting a record high of $125,245 on October 5, many crypto optimists believed Bitcoin’s upward momentum would continue indefinitely. However, that optimism has faded in recent weeks, especially following a flash crash two weeks ago that wiped out billions of dollars in market value.
The Federal Reserve’s Interest Rate Cuts
On Wednesday, the Federal Reserve announced interest rate cuts, setting the benchmark short-term rate between 3.75% and 4%. According to the Wall Street Journal, this marks the lowest rate in three years. This move aligns with President Trump’s long-standing requests for rate cuts since his second term began in January.
While traders welcomed the cuts, Federal Reserve Chair Jerome Powell caused some unease on Wall Street by signaling that further rate cuts in the December meeting are not guaranteed. “Far from it,” Powell cautioned, suggesting a cautious stance moving forward.
Trump’s Tariff Decisions and Crypto Sentiment
President Trump’s recent meeting with Chinese leader Xi Jinping also affected crypto sentiment. Trump announced tariffs on goods imported from China would be lowered by 10%, decreasing from 57% to 47%. This modest reduction raised concerns within the crypto community.
Trump has generally been viewed as a positive force in the cryptocurrency world, having made radical changes such as disbanding the National Cryptocurrency Enforcement Team (NCET) at the Department of Justice, which investigates crypto-related crimes. While most markets benefit from regulation and enforcement to keep things fair and deter bad actors, Trump’s approach seems more lenient, operating under a philosophy described by some as “who gives a damn, get yours.”
Moreover, Trump has issued pardons for high-profile individuals convicted of crypto-related offenses, including Silk Road founder Ross Ulbricht and, most recently, Binance founder Changpeng Zhao. Although Zhao had already served his prison sentence, the pardon likely absolves him from paying $50 million in restitution.
Market Recovery and Broader Cryptocurrency Performance
Bitcoin’s price has rebounded somewhat since its daily low, climbing back to $107,900 at the time of writing. Nevertheless, it remains down more than 5% compared to a month ago. Looking at a longer timeline, Bitcoin’s position is stronger—it traded at approximately $68,500 one year ago, just before the 2024 presidential election period.
Other major cryptocurrencies also faced declines on Thursday: Ethereum fell 4.3%, Binance Coin (BNB) dropped 4%, XRP plummeted 6.7%, and Solana decreased by 6.3%.
The crypto market continues to navigate uncertain times as government policies and economic signals shape its trajectory in the months ahead.
https://gizmodo.com/bitcoin-price-plunges-as-crypto-traders-get-nervous-about-future-2000679860