Key Takeaways
- Bitcoin dropped 6% to $98,940 after Powell’s remarks.
- Powell dismissed the idea of a U.S. Bitcoin reserve.
- The GMCI 30 index fell 7.18% amid broader crypto declines.
Bitcoin fell below the $100,000 mark on Wednesday evening, following U.S. Federal Reserve Chair Jerome Powell’s statements against forming a national Bitcoin reserve.
The cryptocurrency dropped 6% in 24 hours to trade at $98,940, according to The Block.
Previous all-time high
Bitcoin’s decline comes after hitting an all-time high of $108,135 earlier this week, driven by enthusiasm around U.S. President-elect Donald Trump’s plans to establish a strategic Bitcoin reserve.
Powell, however, dismissed such an idea during a press conference, stating:
The central bank is not allowed to hold Bitcoin and is not looking for a law change.
Broader market impact
The broader cryptocurrency market mirrored Bitcoin’s downturn, with Ether falling 6.5% and XRP plunging 12.64%.
The GMCI 30 index, which tracks the performance of the top 30 cryptocurrencies, dropped by 7.18%.
Analyst concerns
Market analysts have raised concerns about a potential sell-off during Trump’s inauguration.
Arthur Hayes, former BitMEX CEO, predicted in a recent article that traders’ optimism surrounding Bitcoin policies could falter once faced with the slow pace of legislative changes.
Stock market reaction
The U.S. stock market also faced steep losses, with the Dow Jones Industrial Average dropping 2.58%, the Nasdaq Composite falling 3.56%, and the S&P 500 declining 2.95%.
Powell’s cautious stance on future interest rate cuts contributed to the broader market sell-off.
Future outlook
As the holiday season approaches, markets are expected to remain subdued, shifting focus toward developments in the incoming Trump administration.
