Bitcoin Takes a Breather Amid Fed Policy Shift

Hola folks!

Welcome back to the cryptosphere. It has been a busy week as the crypto market cooled down a bit in response to the US Fed’s hawkish economic stance. Risk-on assets such as equities and cryptos were impacted, with benchmark cryptos such as BTC and ETH losing about 10% in value.  

While BTC took a breather, exchange tokens and NFTs stole the show. Read on to learn more about the movers and shakers of the crypto market. 

Bitcoin saw its first major stumble in weeks, dropping 10% to close at $94,600, down from $105,000. The pullback comes as the US Federal Reserve’s updated outlook reduced the number of projected interest rate cuts for next year, signaling tighter financial conditions for risk-on assets like Bitcoin. 

Yet, the larger narrative remains: Bitcoin has risen in six of the last seven weeks, bolstered by investor optimism about Trump’s pro-crypto credentials and favorable regulatory shifts. Could this dip be a much-needed reset before Bitcoin charges past the six-figure mark again?

Ethereum-based NFTs made a roaring comeback, with weekly sales surging 76% to $201 million, leading the pack in a $304 million week for digital collectibles. This resurgence eclipsed September’s low and signals renewed excitement in the NFT space. 

Meanwhile, Bitcoin NFTs generated $40 million in sales, while Solana’s collections contributed $29 million. The numbers speak for themselves—collectors are back, and the NFT market’s unpredictable nature is once again fueling interest and excitement.

Amid Bitcoin’s tumble, exchange tokens emerged as star performers, hinting at a shift in trader focus. These tokens reflect both speculative fervor and a hunt for stability in an otherwise volatile market. This dynamic environment showcases how niche assets take the stage, providing fresh opportunities as market participants navigate these wild swings. 

As sentiment shifts, one thing is clear: the crypto market remains a landscape for the bold and adaptable.

Weekly price movement: 

• BTC $95,853 ⏬ 8.26% 

• ETH $3,329 ⏬ 15.41%

• MOVE  $0.7733 ⏫ 24.45% 

• HYPE $28.51  ⏫ 6.41%  

(All data here as of 2.50 p.m., 23 December 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Ethereum ETF inflows accelerated significantly in December, with providers recording $1.66 billion in new investments, representing 74% of the $2.24 billion total inflows since inception. Read more here.

• Bitcoin fell 8.8% to nearly $95,000 last week, the biggest percentage drop since August. The losses came as the Federal Reserve signaled fewer rate cuts for next year while stressing that it prohibited from holding BTC and doesn’t seek a change in the law to do so. Read more here. 

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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