Bitcoin’s price saw dramatic fluctuations this week, plunging to nearly $92,000 on Friday before rebounding to over $97,000. This volatility followed Tuesday’s record high of more than $108,000. The cryptocurrency’s sharp sell-off was partly triggered by the Federal Reserve’s announcement on Wednesday that it would not hold bitcoin as part of its reserves, causing the price to drop by 7%.
“We’re not allowed to own bitcoin,” Federal Reserve Chair Jerome Powell clarified. “The Federal Reserve Act dictates what assets we can hold, and we’re not seeking any changes to that law. If there’s to be a change, that’s a matter for Congress to decide—not the Fed.”
In tandem with bitcoin’s decline, the overall global cryptocurrency market cap decreased by 1.2%, falling to $3.52 trillion, according to CoinGecko.
Ethereum, the second-largest cryptocurrency by market cap, also experienced a significant dip of 10%. However, it recovered by Friday morning, reaching approximately $3,467. Similarly, Solana, ranked as the sixth-most valuable cryptocurrency with a market cap of $92 billion, saw its price drop by 10%, though it was trading at $192 at the time of writing.
Adding to market pressure, bitcoin exchange-traded funds (ETFs), which were introduced earlier this year, reported $650 million in outflows on Thursday—the first in several weeks. Ethereum ETFs also faced significant outflows, totaling over $60 million.
सम्बंधित ख़बरें
As the holiday season approaches, market analysts are bracing for mixed performance across the crypto sector. James Toledano, Chief Operating Officer at Unity Wallet, explained, “Bitcoin’s behavior during Christmas and New Year has historically been unpredictable. Sometimes it surges at the start of the new year, while other times it dips. Volatility is a hallmark of bitcoin, as much as water is inherently wet.”
Toledano added that reduced liquidity during the holiday period could amplify volatility, although the absence of major institutional trades might help stabilize prices. “Major market catalysts or macroeconomic news could still trigger sudden movements,” he noted.
Looking ahead, Toledano highlighted key events that could impact bitcoin prices, including the upcoming inauguration of pro-bitcoin Donald Trump as U.S. President on January 20th. “This year, much will depend on investor sentiment following 2024’s ETF approvals and broader market trends. But with Trump’s return to the White House, significant price action seems almost inevitable,” he said.