Bitcoin’s value falls below $100,000 before Federal Reserve interest rate announcement
Bitcoin’s value has declined to less than $100,000 after a period of consistent gains following the election, coinciding with an air of caution among investors leading up to the Federal Reserve’s upcoming interest rate decision and concerns surrounding tariffs. The leading cryptocurrency, Bitcoin, is currently valued at $98,754.01 as of 7 a.m. E.T. on Monday, having recently soared to an all-time high of $109,478 before Trump’s inauguration on January 20.
This drop in Bitcoin’s worth is significant as it serves as a significant indicator of the overall strength of the digital currency market, with other major cryptocurrencies like ethereum and XRP also experiencing declines in value. Some observers view President Donald Trump’s newfound interest in virtual currencies as a strong endorsement of cryptocurrencies as a whole, while others argue that he merely recognizes the profit potential associated with cryptocurrencies and the need to take them seriously. This sentiment is further highlighted by the establishment of Trump’s digital assets-focused “working group.”
The recent dip in Bitcoin’s value precedes a crucial week of economic events and data releases. The Federal Reserve Open Market Committee (FOMC) is set to hold meetings on Tuesday and Wednesday, with expectations leaning towards the maintenance of current interest rates despite calls for cuts, including from President Trump himself. During a video call at the World Economic Forum (WEF), Trump emphasized the importance of lowering interest rates immediately, attributing economic progress to his recent election victory, which has gained global recognition.
The downward pressure on Bitcoin may also be linked to the debut of China’s AI bot DeepSeek, a potential competitor to OpenAI’s ChatGPT. This development has rattled investors, particularly in the American tech sector, with repercussions felt across the cryptocurrency landscape. Financial analyst Adam Kobeissi noted the anxiety among investors as evidenced by the declining value of the Solana crypto token, emphasizing a prevailing sense of risk aversion amid the current market conditions.
Despite the recent downturn in Bitcoin’s value, some of President Trump’s pledges concerning cryptocurrencies have materialized. Trump signed an executive order establishing a specialized “working group” dedicated to digital assets, which will be led by AI and crypto expert David Sacks. This group aims to provide regulatory clarity to the industry and explore the potential creation of a national digital asset reserve. Trump’s commitments to the cryptocurrency sector were previously underscored during his appearance at the Bitcoin Conference 2024, where he vowed to establish a “Strategic National Bitcoin stockpile” and projected that Bitcoin could surpass gold in terms of market capitalization.
Renowned Bitcoin advocate Samson Mow, who heads the crypto-centric firm JAN3, remains optimistic about Bitcoin’s trajectory, predicting that its value could reach $1 million by 2025. Additionally, he expressed confidence in President Trump fulfilling his commitments in advancing the cryptocurrency sector.
