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

Bitcoin’s worth fell to $109,000 Wednesday afternoon after Federal Reserve Chair Jerome Powell signaled that further charge cuts might not observe in December. Since then, Bitcoin worth has leveled close to $111,000.

The drop got here shortly after the central financial institution decreased its benchmark rate of interest by 0.25 proportion factors to a goal vary of three.75%–4%.

The reduce — the Fed’s second of 2025 after a transfer in September — ended an extended stretch of charge holds. The coverage shift is meant to decrease borrowing prices and help financial exercise. However Powell’s feedback that additional cuts should not assured this 12 months sparked promoting throughout threat property.

Earlier than the announcement, Bitcoin traded close to $116,000 on Monday and briefly dipped under $111,000 early Tuesday. The worth briefly bounced on the information earlier than sliding once more as Powell spoke. Bitcoin is presently buying and selling close to $111,200, in response to Bitcoin Journal Professional knowledge.

Through the press convention, as Jerome Powell stated that December’s charge cuts aren’t assured, Bitcoin’s worth instantly reacted — plunging to $109,000 in a pointy pink candle earlier than shortly recovering. The broader crypto market reacted equally. 

Powell stated that inflation excluding the affect of tariffs is “not up to now” from the central financial institution’s 2% goal, however emphasised that policymakers have “not decided about December.” Powell famous that officers held “strongly differing views” throughout right this moment’s assembly. 

Following his remarks, markets sharply trimmed expectations for an additional charge reduce this 12 months. Fed funds futures now worth a 71% probability of a December reduce, down from about 90% earlier within the day, in response to CME knowledge and on prediction markets like Kalshi and Polymarket.

The 2-year Treasury yield jumped 9 foundation factors as merchants reassessed the Fed’s near-term trajectory.

Traditionally, Bitcoin has reacted sharply to monetary-policy modifications. After the Fed’s emergency cuts in March 2020, Bitcoin plunged practically 39% earlier than recovering. When the Fed reduce in September 2025, market response was restricted — suggesting expectations have been already priced in.

Bitcoin worth as Fed alerts finish of Quantitative Tightening

Powell additionally stated the central financial institution is approaching the tip of its Quantitative Tightening program, confirming the Fed expects to cease QT by December. This includes letting some holdings of Treasuries and mortgage securities run off the stability sheet as they mature, somewhat than reinvesting the principal.

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

The method has been underway since 2022, eradicating practically $1 trillion in securities as a part of efforts to combat inflation.