Bitcoin has fallen below $64,000: the tough rhetoric of the new Fed chair has triggered a sell-off
The digital asset market experienced a sharp decline following the first Federal Reserve meeting under the leadership of new Chairman Kevin Warsh. The flagship cryptocurrency broke through the psychologically important level of $64,000, dropping to around ~$63,680.
The regulator left the key interest rate unchanged — in the range of 3.5–3.75% per annum, which matched the consensus forecast. However, the key factor putting pressure on risky assets was Warsh's hawkish rhetoric, who hinted at the possibility of a rate hike before the end of the current year. The dot plot revealed a split within the FOMC: nine officials favor maintaining or lowering borrowing costs, while another nine expect at least one rate increase.
New Fed Structure and Focus on Inflation
Warsh announced the creation of five working groups tasked with reviewing the regulator's communication strategy, asset balance, data sources, the impact of artificial intelligence on the economy, and methods for combating inflation. During the press conference, the Fed Chairman used the term "price stability" more than ten times, which was unequivocally interpreted by markets as a signal that fighting inflation takes priority over supporting economic growth. Investors reacted immediately: the yield on two-year U.S. Treasury bonds soared by 14.4 basis points, and stock indices moved downward.
The Fed identified the surge in energy prices amid the escalation of the conflict in the Middle East as the main macroeconomic risk. Warsh emphasized that the commitment to return inflation to the target level of 2% is "unconditional."
Cryptocurrency Market Reaction: Mass Sell-off
Bitcoin collapsed to $63,680, losing more than 2% in a short period. Ethereum followed the leader, declining by 3.15%. Solana and XRP fell by 2.9% and 3.8%, respectively. The only asset in the top 10 to show positive momentum was TRX, which gained 0.75%.
The GMCI 30 index, which tracks the performance of the 30 largest cryptocurrencies by market capitalization, lost 2.6%, recording a broad capital outflow from the sector. Notably, traditional safe-haven assets also did not hold up: gold fell by 1.39%, and silver by 2.79%.
At the same time, the stock market showed a mixed reaction: the S&P 500 and Nasdaq indices rose amid news of the signing of an interim agreement with Iran and the resumption of shipping through the Strait of Hormuz, which reduced geopolitical risks for the energy sector.
My analysis: The cryptocurrency market has once again confirmed its high sensitivity to Fed monetary policy. Warsh's hawkish stance and uncertainty over the rate trajectory create an extremely unfavorable backdrop for risky assets in the short term. Until inflation shows a sustained decline toward the target level, any tightening of the regulator's rhetoric will trigger profit-taking and a shift into stablecoins. The key support level for Bitcoin is currently the $62,000–$63,000 zone — a break below it could open the door to a deeper correction.