The cryptocurrency market faces challenges in early 2025, with Bitcoin struggling amid Fed policy shifts and growing concerns over Trump's economic plans.
 |
| Bitcoin drops below $90,000 as Fed rate policy speculation and rising Treasury yields put pressure on the digital asset, despite hopes for a boom under Trump. US President Donald Trump. Image/ Illustration: ChicHue |
Washington, USA - January 14, 2025:
Bitcoin and the broader cryptocurrency market have faced a challenging start to 2025, with the digital asset briefly falling below $90,000 amid growing concerns over the Federal Reserve's interest-rate policies. The dip, nearly 5% lower than the beginning of the year, came as investors shifted focus to a possible prolonged Fed rate pause, sparked by the resilience of the US economy and potential inflationary risks from incoming President Donald Trump’s policies.
This uncertainty has dampened some of the enthusiasm that crypto investors had following Trump’s promise to make the US a hub for digital assets. While Bitcoin has seen a significant recovery from its low, it remains largely flat for January. Smaller cryptocurrencies like Ether are also grappling with losses.
The rise in Treasury yields and the strengthening of the US dollar have added pressure on risk assets, including cryptocurrencies. However, the crypto community still holds hope for a boom under Trump's leadership, with some expecting crypto-friendly executive orders early in his term. MicroStrategy, a major Bitcoin accumulator, continues to expand its holdings, signaling optimism.
Despite the positive outlook from some sectors, technical analysts suggest Bitcoin is in a "corrective phase" and may test lower support levels around $87,500. Additionally, Bitcoin-related ETFs have seen substantial outflows, highlighting investor caution in the current market environment.