The Federal Reserve reduced its key interest rate by 0.25%, immediately impacting the crypto market, which lost $239 million in mere minutes.
Fed Rate Cut and Its Consequences
On December 19, the Federal Reserve cut its key interest rate by 25 basis points and warned of possible further cuts in the coming years. Fed Chair Jerome Powell noted that since the U.S. government's stance is now less restrictive, the agency can afford to be more cautious in further adjustments. Following this decision, the crypto market saw a surge in liquidations by $200 million, leading to a total of $239.2 million just 30 minutes after the announcement.
Impact on Major Cryptocurrencies
The Fed's rate cut significantly impacted major cryptocurrencies. Bitcoin briefly fell below the $100,000 mark, losing 5%, before slightly recovering. Ethereum dipped by 0.68% immediately following the rate cut and saw a 4.5% decrease over the past 24 hours, maintaining a price of $3,674.
Altcoins Market and Meme Coins
Altcoins were also affected by the Fed rate cut. Solana dipped by 1.15%, and over the past 24 hours, it decreased by 3.58%, trading at $208.98. The meme coin market lost nearly 8% of its market cap, totaling $105.2 billion. The leading meme coin, Dogecoin, fell by more than 7%.
The Fed's cautious approach to future rate cuts suggests a continued focus on inflation control, potentially leading to a stronger dollar and reduced interest in cryptocurrency investments.
