Daily News | Fed Showed a Hawkish Stance on Cutting Interest Rates, Crypto Market Cap Drops by Over 7.5%, Three Major US Stock Indices All Fell
Crypto Daily Digest: Powell showed hawkish statement, Bitcoin fell below the $100,000 mark, with crypto market cap falling below $3.7 trillion
According to Coinglass data, BTC ETFs had a net outflow of $84.3 million yesterday, of which GBTC had an outflow of $35.9 million; BTCO outflows $25.2 million.
Yesterday, the ETH ETFs had a net outflow of $79.4 million, of which $49.2 million was from ETHE; ETHW outflow of $14.6 million.
Powell: The Fed has no intention of holding Bitcoin and will not seek to change the law
On December 18, the Federal Reserve cut interest rates for the third time, marking the end of the 2024 annual interest rate decision. But then Powell announced at a press conference that the Federal Reserve would only cut interest rates twice more in 2025, which was undoubtedly a hawkish statement for the market. Powell also stated that geopolitical instability remains a risk. There is significant uncertainty in predicting the economy for the next three years.
Not only is there an expectation of interest rate cuts, but Powell also made it clear that the Federal Reserve has no intention of holding Bitcoin when it comes to whether Trump will establish Bitcoin reserves. As for the legal issue of holding Bitcoin, Powell said, “This is something Congress needs to consider, but we have no intention of seeking to change the law.”
Powell’s hawkish remarks have strongly suppressed buying in the crypto market. In the past 24 hours, the entire network has experienced a $843 million sell-off, with multiple orders selling $743 million; Bitcoin prices fell 4%, hitting a low of $98,839.87; The price of Ethereum fell 5.2%, hitting a low of $3,564.24.
The total market cap of cryptocurrencies has fallen below $3.7 trillion, with a drop of 7.9% in the past 24 hours
According to CoinGecko data, the total market cap of cryptocurrencies has fallen below $3.7 trillion, now reporting $3.579 trillion, with a decline of 7.9% in the past 24 hours.
MicroStrategy plans to shift towards fixed income securities to raise funds for purchasing Bitcoin
According to Bloomberg, Michael Saylor, co-founder and chairman of MicroStrategy, stated that once the current fundraising plan is exhausted, the company will shift from a leveraged Bitcoin agency program to a more focused fixed income securities program to raise funds to purchase cryptocurrencies.
Saylor said, “We have $7.2 billion worth of convertible bonds, but $4 billion of them are essentially equity, traded at strike and call prices, with a delta of about 100%, resembling equity. We hope to go back and establish smarter leverage to benefit our common stockholders.”
Trump’s crypto project WLFI partnered with Ethena Labs
According to The Block, World Liberty Financial, a DeFi project of the Trump family, announced a partnership with Ethena Labs, seeking a “long-term partnership” that will begin with Ethena’s revenue token sUSDe.
Macro: The Fed cut interest rates as scheduled, the US dollar soared, and the three major indexes of gold and US stocks all fell across the board
On December 18, the Federal Reserve cut interest rates by 25 basis points as expected, and Federal Reserve Chairman Powell said that the Fed will cut interest rates twice next year in the face of rising inflation. This prediction is consistent with Trump’s wait-and-see attitude when he returns to the White House in January next year.
And the new dot plot shows that several officials expect the number of interest rate cuts next year to be less than estimated a few months ago. According to the median estimate, Federal Reserve officials now expect the benchmark interest rate to reach a range of 3.75% to 4% by the end of 2025, meaning two rate cuts of 25 basis points each. Most economists surveyed by Bloomberg had previously predicted that the median estimate in the dot matrix would point to three interest rate cuts by the Federal Reserve next year.
After the announcement of the interest rate decision, spot gold plummeted more than 2% to a one month low. The three major indexes of the US stock market all closed sharply lower. The Nasdaq index fell 3.56%, marking the largest daily decline since July 25; The S&P 500 index fell 2.95%, marking its largest daily decline since August 6; The Dow Jones Industrial Average fell 2.58%, marking its 10th consecutive day of decline and the longest continuous decline since October 1974.
Large tech stocks also fell across the board, with Tesla falling over 8%, Intel falling over 5%, Amazon falling over 4%, Google, Meta, Microsoft and Netflix fell over 3%, Apple fell over 2%, and Nvidia fell over 1%. Quantum Corporation, a quantum computer concept stock, rose over 150%, while Quantum Computing rose about 53%.
