Bitcoin fell for the first time in four days, with risk appetite weakening across financial markets after Federal Reserve policymakers signaled greater caution about future interest rate cuts. Bitcoin once fell 5.3% to $100,752, after breaking through $108,000 for the first time the day before. The top seven digital tokens by market capitalization were all lower, data compiled by Bloomberg showed.
“Global markets are pricing in expectations of a less dovish Fed in 2025,” said Zaheer Ebtikar, founder of cryptocurrency fund Split Capital, “so cryptocurrency event traders and market makers are reducing risk.”
Federal Reserve officials on Wednesday cut their benchmark interest rate for a third consecutive time, but their latest quarterly forecast showed fewer cuts in 2025. Lower interest rates typically spur demand for risky assets like cryptocurrencies.
David Lawant, head of research at cryptocurrency prime broker FalconX, said that while interest rate cut predictions are currently affecting prices, they may not have a long-term impact because Bitcoin’s correlation with major stock indexes has declined.
“The slower pace of rate cuts in 2025 was not entirely unexpected, but it does have some impact on risk assets including cryptocurrencies,” Lawant said. “While macro factors have traditionally influenced cryptocurrency price movements, industry-specific factors are likely to dominate in the coming weeks and months, especially as markets anticipate policy changes from the incoming new administration.”