{"id":17478,"date":"2025-10-30T02:08:25","date_gmt":"2025-10-30T01:08:25","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=17478"},"modified":"2025-10-30T02:08:25","modified_gmt":"2025-10-30T01:08:25","slug":"bitcoin-plummets-to-109000-as-federal-reserve-lowers-interest-rates","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/10\/30\/bitcoin-plummets-to-109000-as-federal-reserve-lowers-interest-rates\/","title":{"rendered":"Bitcoin Plummets to $109,000 as Federal Reserve Lowers Interest Rates"},"content":{"rendered":"

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Bitcoin\u2019s value dropped to $109,000 Wednesday afternoon after Federal Reserve Chair Jerome Powell indicated that further rate reductions might not occur in December. Since that moment, Bitcoin’s value has stabilized around $111,000.<\/p>\n

The decline happened shortly after the central bank decreased its key interest rate<\/a> by 0.25 percentage points to a target range of 3.75%\u20134%.<\/p>\n

This reduction \u2014 the Fed\u2019s second of 2025 following a cut in September<\/a> \u2014 concluded a prolonged period of rate holds. The policy alteration aims to reduce borrowing expenses and bolster economic activity. However, Powell\u2019s remarks indicating that additional cuts are not assured this year incited selling across risk assets.<\/p>\n

Prior to the announcement, Bitcoin was trading around $116,000 on Monday and briefly fell below $111,000 early Tuesday. The price briefly rebounded on the news before declining again as Powell spoke. Currently, Bitcoin is trading around $111,200, according to Bitcoin Magazine Pro data.<\/p>\n

During the press conference, as Jerome Powell stated that December\u2019s rate cuts aren\u2019t assured, Bitcoin\u2019s price swiftly reacted \u2014 plummeting to $109,000 in a sharp red candle before rapidly recovering. The wider crypto market responded in a similar fashion.<\/p>\n

Powell mentioned that inflation excluding the effects of tariffs is \u201cnot too far\u201d from the central bank\u2019s 2% goal, but he stressed that policymakers have \u201cnot made a decision about December.\u201d He noted that officials held \u201cstrongly divergent opinions\u201d during today\u2019s meeting.<\/p>\n

In the wake of his comments, markets significantly reduced expectations for another rate cut this year. Fed funds futures now indicate a 71% likelihood of a December cut, down from approximately 90% earlier in the day, according to CME data and on prediction markets like Kalshi and Polymarket.<\/p>\n

The two-year Treasury yield rose by 9 basis points as traders re-evaluated the Fed\u2019s near-term direction.<\/p>\n

Historically, Bitcoin has responded sharply to monetary-policy modifications. After the Fed\u2019s emergency reductions in March 2020, Bitcoin plummeted nearly 39% before recovering. When the Fed cut in September 2025, the market’s reaction was limited \u2014 suggesting that expectations were already factored in.<\/p>\n

Bitcoin value as Fed indicates conclusion of Quantitative Tightening<\/h2>\n

Powell also mentioned that the central bank is nearing the end of its Quantitative Tightening program, confirming that the Fed anticipates halting QT by December. This entails<\/a> allowing some Treasury and mortgage securities to roll off the balance sheet as they mature, instead of reinvesting the principal.<\/p>\n

QT diminishes liquidity by contracting the Fed\u2019s balance sheet through allowing government bonds to mature without reinvestment or by selling them into the market.<\/p>\n

This process has been in motion since 2022, eliminating nearly $1 trillion in securities as part of efforts to combat inflation.<\/p>\n

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Ending QT would halt that depletion of liquidity \u2014 a transition many analysts believe could eventually foster flows into risk assets, including Bitcoin.<\/p>\n

However, Powell cautioned that policy will remain contingent on economic data, adding further uncertainty to market expectations.<\/p>\n<\/div>\n


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“`html Bitcoin\u2019s value dropped to $109,000 Wednesday afternoon after Federal Reserve Chair Jerome Powell indicated that further rate reductions might not occur in December. Since that moment, Bitcoin’s value has stabilized around $111,000. 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