Bitcoin plunged below $64,000: the "hawkish" rhetoric of the new Fed chair crashed the crypto market
The first cryptocurrency broke through the psychological mark of $64,000, collapsing to $63,680. This is a direct consequence of the first Federal Reserve meeting under the leadership of new Chairman Kevin Warsh, whose rhetoric turned out to be much more "hawkish" than the market expected.
The Fed left the key interest rate unchanged — at 3.5–3.75% per annum. However, Warsh gave a clear signal: a rate hike is possible before the end of the year. The dot plot split officials' votes evenly: nine are in favor of maintaining or lowering the rate, nine are in favor of at least one hike. The head of the agency himself refrained from a personal assessment, calling this format "limiting" for future policy.
At the press conference, Warsh repeated the mantra of "price stability" more than ten times, and also announced the creation of five working groups that will study the regulator's communications, asset balance, data sources, the impact of AI on the economy, and methods of combating inflation. The main risk for the U.S. economy was identified as a surge in energy prices due to the escalation in the Middle East.
Market Reaction: Cryptocurrencies and Traditional Assets
Bitcoin crashed to $63,680, Ethereum lost 3.15%, Solana and XRP fell by 2.9% and 3.8% respectively. The only exception was TRX, which showed modest growth of 0.75%. The GMCI 30 index, tracking the largest assets by market capitalization, declined by 2.6%.
Traditional markets showed a mixed picture. The yield on two-year U.S. Treasury bonds surged by 14.4 basis points, while the S&P 500 and Nasdaq stock indices unexpectedly rose. The reason was the signing of an interim agreement with Iran and the opening of the Strait of Hormuz, which temporarily reduced geopolitical risks. However, gold fell by 1.39%, and silver depreciated by 2.79%.
Expert Comment: The market clearly overestimated the Fed's readiness to ease policy. Warsh's rhetoric is not just words, but a signal that the fight against inflation remains priority number one, even at the cost of slowing the economy. For Bitcoin, this means that in the coming weeks we may see a test of the $60,000–$62,000 zone, and without a new positive catalyst (e.g., ETF approval), the bullish scenario is temporarily postponed.