Bitcoin Price Crashes To $109,000, Fed Cuts Rates

Bitcoin’s value fell to $109,000 on Wednesday afternoon after Federal Reserve Chairman Jerome Powell indicated there could also be no additional rate of interest cuts in December. Since then, the Bitcoin value has risen nearly $111,000.

The decline got here shortly after the central financial institution lower its benchmark rate of interest by 0.25 share factors to a goal vary of three.75% to 4%.

The lower – the Fed’s second in 2025 after a measure in September – ended a protracted interval of price cuts. The coverage change is meant to cut back borrowing prices and help financial exercise. However Powell’s feedback that additional cuts will not be assured this 12 months led to the promoting of dangerous property.

Earlier than the announcement, Bitcoin was buying and selling close to $116,000 on Monday and briefly fell beneath $111,000 early Tuesday. The worth bounced briefly on the information earlier than falling once more as Powell spoke. Bitcoin is at present buying and selling round $111,200, in line with knowledge from Bitcoin Journal Professional.

When Jerome Powell stated throughout the press convention that December’s price cuts will not be assured, Bitcoin’s value reacted instantly, falling to $109,000 in a pointy crimson candle earlier than rapidly recovering. The broader crypto market responded in sort.

Powell stated inflation excluding the influence of charges is “not that far” from the central financial institution’s 2% goal, however emphasised that policymakers “haven’t decided on December.” Powell famous that officers had “extensively differing views” at at the moment’s assembly.

Following his feedback, markets sharply lowered expectations for one more price lower this 12 months. Fed funds futures now estimate a 71% probability of a price lower in December, in comparison with about 90% earlier within the day, in line with CME knowledge and on prediction markets like Kalshi and Polymarket.

Two-year Treasury yields rose 9 foundation factors as merchants reassessed the Fed’s short-term trajectory.

Traditionally, Bitcoin has responded sharply to modifications in financial coverage. Following the Fed’s emergency cuts in March 2020, Bitcoin fell practically 39% earlier than recovering. When the Fed lower spending in September 2025, the market’s response was restricted, suggesting expectations have been already priced in.

Bitcoin Worth because the Fed Alerts the Finish of Quantitative Tightening

Powell additionally stated the central financial institution is nearing the top of its quantitative tightening program, confirming that the Fed expects to finish the QT by December. This implies by permitting some authorities bonds and mortgage bonds to vanish from the steadiness sheet as they mature, somewhat than reinvesting the principal.

QT reduces liquidity by shrinking the Fed’s steadiness sheet by permitting authorities bonds to mature with out reinvestment or by promoting them into the market.

The method has been ongoing since 2022 and has eliminated practically $1 trillion in securities as a part of efforts to fight inflation.

Ending QT would finish the lack of liquidity – a shift that many analysts say may finally help flows into dangerous property, together with Bitcoin.

Nevertheless, Powell warned that coverage will stay depending on financial knowledge, making market expectations much more unsure.