Amid the hype of the future of cryptocurrencies under the Trump administration, Bitcoin – the world’s leading crypto – showed its vulnerability and volatility after the US Federal Reserve hinted of lesse key policy rate reductions next year.
Bitcoin’s price dropped by around 10% in value, or to $92,800 from $102,800 on Thursday.
Ethereum, another major cryptocurrency, lost 10.5% in value as of to $3,290.
Based on reports by Turkish newswire service Anadolu, Bitcoin started 2024 at $44,000, citing data from the Coinmarketcap website. This means that Bitcoin investors have realized more than a 100% return in investment so far this year.
The market cap of Bitcoin has been pegged at $1.88 trillion.
US president-elect Donald Trump has promised to make the US “the crypto capital of the planet” and to establish a national Bitcoin reserve that would allow the country to hold Bitcoin for strategic purposes. This move is expected to encourage other countries to create their own crypto reserve.
Bitcoin gained around 44% in the month after the Trump’s victory in the US presidential polls.
To recall, outgoing President Joe Biden has imposed tightening regulations on crypto assets while US Securities and Exchange Commission (SEC) Chair Gary Gensler also took a tough stance against the crypto market.
Cryptocurrencies are still considered risky investments, but their volatility can promise higher returns compared to publicly-listed equities in the stock market.
