As hawkish signals from the Federal Reserve rocked risk
appetite and the possibility of coin sales by the U.S. government also weighed,
Bitcoin dropped on Thursday, continuing a run of severe losses.
As traders prepared for a slower pace of rate cuts in 2025,
the largest cryptocurrency in the world essentially destroyed a new year
comeback this week, following broader falls in risk-driven assets.
Although losses on Thursday were more skewed toward Bitcoin
following reports that the Department of Justice had obtained court authority
to sell coins seized from the Silk Road bazaar, broader cryptocurrency values
also fell.
By 00:56 ET (05:56 GMT), Bitcoin had down 2.1% to $94,471.1 after plunging as
low as $93,323.1 earlier in the day.
DOJ gets court approval to sell $6.5 bln Bitcoin
According to media sources, the DOJ was granted permission
by the court to sell some 69,370 Bitcoin that were taken during a 2014
crackdown on the Silk Road internet criminal market.
The tokens have a combined value of over $6.5 billion, which
puts significant selling pressure on the largest cryptocurrency in the world.
The DOJ was recently observed organizing its Bitcoin hoard
for a possible sale after previously selling off its seized cryptocurrency
holdings. The DOJ has a deal with Coinbase (NASDAQ:COIN) to manage the
government's cryptocurrency sales.
Additionally, the sale of Bitcoin dashed expectations that, under incoming
President Donald Trump, the DOJ would turn its Bitcoin holdings into a
strategic reserve.
Despite Trump's pledge to establish a national Bitcoin reserve, it is still
Crypto price today: hawkish Fed signals batter crypto
markets
Alongside Bitcoin, other cryptocurrency values dropped as
the Fed's hawkish signals reduced risk appetite.
In light of the U.S. economy's resiliency and worries about
sticky inflation, the Fed's intention to drop interest rates more gradually in
2025 was reaffirmed in the minutes of its December meeting.
Concerns about inflation being sustained by Trump's
expansionary and protectionist policies, which may keep rates higher for
longer, were also voiced by policymakers.
Since higher rates reduce investor interest for riskier assets, they are bad
news for speculative assets like cryptocurrency.
After suffering significant losses earlier in the week,
Ether steadied at $3,328.41 among altcoins. XRP recovered somewhat from recent
losses, rising 2.2% to $2.3478.
Cardano, Solana, and
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