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 price cuts could not observe in December. Since then, Bitcoin worth has leveled close to $111,000.

The drop got here shortly after the central financial institution diminished 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 price holds. The coverage shift is meant to decrease borrowing prices and assist financial exercise. However Powell’s feedback that additional cuts are usually not assured this yr sparked promoting throughout threat belongings.

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

Through the press convention, as Jerome Powell mentioned that December’s price 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 mentioned that inflation excluding the affect of tariffs is “not to date” 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 in the present day’s assembly. 

Following his remarks, markets sharply trimmed expectations for an additional price reduce this yr. Fed funds futures now worth a 71% likelihood of a December reduce, down from about 90% earlier within the day, in line with 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 almost 39% earlier than recovering. When the Fed reduce in September 2025, market response was restricted — suggesting expectations had been already priced in.

Bitcoin worth as Fed alerts finish of Quantitative Tightening

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

QT reduces liquidity by shrinking the Fed’s steadiness 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 almost $1 trillion in securities as a part of efforts to struggle inflation.