Bitcoin has experienced its first notable weekly drop since the election, linked to the Fed's interest rate projections.
Current State of Bitcoin
According to TradingView, Bitcoin fell by 10% during the week ending December 22, closing at $94,645—down $10,500 from its starting price. The cryptocurrency has shown consistent growth since the election win, with a modest decline of 0.78% noted during the week ending November 24.
Role of the Federal Reserve
The downturn coincided with an announcement by the Fed revising its 2025 interest rate cut projections. Instead of five cuts, only two are now expected, which could create challenges for risk-on assets.
Industry Optimism and Expert Predictions
Despite the dip, leading firms like Bitwise and VanEck predict Bitcoin could reach $180,000-$200,000 by 2025 due to increased institutional interest and potential U.S. Bitcoin reserves. Appointments in the Trump administration might also create a more favorable environment for cryptocurrencies.
Bitcoin's price drop in response to economic news may be temporary, given long-term growth forecasts and the support of a crypto-friendly policy course. Experts continue to anticipate asset value increases in the coming years.
