Cryptocurrency plunges: Bitcoin falls below $95,000 pending Federal Reserve decision
In the ever-evolving world of cryptocurrency, Bitcoin has taken on a new role as a hedge against fiat instability. This shift from internal dynamics, such as mining or halving cycles, has become more prominent in 2025, with external policy shocks like tariffs and Federal interest rate policy becoming significant drivers of volatility.
The recent tariffs announcement by President Trump, imposing a 100% tariff on foreign-made films, has had an impact on Bitcoin's price. Initially, Bitcoin benefited from tariff fears in April, but it has since reversed course amid tightening U.S. policy expectations.
The Federal Reserve's upcoming decision and press conference are causing a stir in the crypto markets. Analysts expect the Fed to maintain rates between 4.25% and 4.50% in the meeting. However, Chair Jerome Powell has signalled caution due to persistent inflation and unpredictable tariff disruptions.
The Fed's decision may determine Bitcoin's next leg. If the Fed signals a prolonged hold or hints at future tightening, Bitcoin may struggle to hold current levels. On the other hand, any unexpected dovish pivot or renewed instability from tariff blowback could reignite interest in decentralized assets.
The recent drop in Bitcoin's price, from over $97,000 to the $94,000 range, illustrates how deeply interconnected crypto markets have become with broader macroeconomic signals. Notably, Ethereum dropped 2.5% on the day.
Meme coins like Dogecoin and Pepe saw double-digit declines as well, reflecting the broader market sentiment. However, Bitcoin is expected to continue evolving as a digital store of value with potential significant price increases, ranging in optimistic scenarios up to 1 million USD or more by 2030.
This growth is supported by technological upgrades like Taproot and the Lightning Network as well as expanding roles in areas like NFTs and the metaverse. Yet, it remains a high-risk investment subject to economic and regulatory factors.
Amid this uncertainty, DeFi platforms have reported slowing user activity amid the uncertain rate outlook. Investors now await the Fed's decision with bated breath, as it could potentially set the tone for the crypto market in the coming weeks.
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