With a cautious Federal Reserve policy outlook dampening euphoria following Donald Trump's victory in the US presidential election, Bitcoin is headed for its first weekly loss.
By 2:50 pm (local time) on Sunday, the digital asset had dropped by over 7% in New York. The value of the cryptocurrency market gauge, which includes popular memes like Dogecoin and Ether, dropped by almost 10%.
Sunday's price of bitcoin was around $95,000, down roughly $13,000 from its peak on December 17. Additionally, this represents the largest decline since September and ends the value's consistent upward trend of over 40% since Trump was elected as the next US president.
According to David Lawant, head of research at crypto prime broker FalconX, choppy price movement in the near term ahead of a "bullish trajectory" until the first quarter of 2025 is still the "most likely scenario," as reported by Bloomberg.
Since December 27 is probably going to be the largest options expiration event in cryptocurrency history, Lawant continued, "a low-liquidity environment may bring more volatility as we enter into the final days of the year."
Global stocks plummeted after the Fed announced a third consecutive interest rate cut on Wednesday, along with indications of gradual monetary easing in the next year. High spirits in the cryptocurrency market, where traders bet on favorable regulations under Trump, were tempered by the hawkish stance.
Bo Hines, a former congressional candidate for a North Carolina district, was named executive director of the Presidential Council of Advisers on Digital Assets by the Republican on Sunday. David Sacks, the incoming crypto czar, will serve as its chair.
Trump called cryptocurrencies a “scam” during his first administration. During his first tenure, he reduced corporation taxes, which increased market liquidity and encouraged more investments in high-growth assets like cryptocurrencies.
Trump presented himself as a "crypto-friendly" candidate during the polling campaign, even promising to turn the US into the "bitcoin and cryptocurrency capital of the world." Additionally, Trump pledged to prevent the US federal government from selling off its cryptocurrency holdings.
