Bitcoin, which recently fell from a high of $100,000, is now facing the threat of a bigger drop.
The $4.1 trillion drop in the global money supply has sparked fears that Bitcoin’s price could fall to $20,000 in the coming weeks.
The Federal Reserve’s (Fed) tighter monetary policy and gradual rate cuts are adding pressure to the crypto market, especially with inflation remaining high and the United States’ (US) debt continuing to rise.
In a press conference, Fed Chairman Jerome Powell explained that inflation is now “more difficult” than previously expected.
The Fed is expected to continue cutting rates slowly, wary of inflation that has appeared to be rising again in recent months.
Bitcoin and crypto market analyst Yuya Hasegawa warned that the Fed’s policy changes could be a catalyst for more instability and urged investors to be cautious and closely monitor whether Bitcoin can weather this challenge.
With political uncertainty rising, 2025 could be a defining year for the stability of the US economy and the future of cryptocurrencies.
