On Thursday, Bitcoin and various altcoins such as Avalanche, Dogecoin, and IOTA experienced declines, erasing some of the recent gains following the Federal Reserve’s decision.
Bitcoin (BTC) fell from a weekly high of $87,500 to $84,000. Ethereum (ETH) decreased to $1,965, while Dogecoin (DOGE), IOTA (IOTA), and JasmyCoin (JASMY) each saw declines of over 4%. The total market capitalization of all cryptocurrencies fell by 1.5%, bringing it down to $2.74 trillion.
Despite these shifts, Bitcoin and other altcoins struggled to gain traction after Donald Trump stated that cryptocurrency would enhance the US dollar’s supremacy. He made these remarks in a pre-recorded video for a crypto conference in New York City, continuing to share his favorable view of digital currencies.
The decline in these digital assets can be attributed, in part, to the absence of specific policy changes that Trump announced. Prior to his statement, there were expectations that he might advocate for making crypto trading tax-exempt in the U.S.
The Trump administration has already made notable strides for the cryptocurrency sector, proposing the establishment of a Strategic Bitcoin Reserve composed of seized coins. Additionally, he signed an executive order to create a crypto reserve containing several U.S.-based coins, including Cardano (ADA) and Ripple (XRP).
Critically, the Securities and Exchange Commission has concluded its prolonged legal disputes with the cryptocurrency sector. On Wednesday, it officially dropped its lawsuit against Ripple Labs that had persisted for years, as well as other actions against companies like Kraken and Coinbase.
The drop in Bitcoin and altcoins correlates with the market’s reactions to the Federal Reserve’s decision made on Wednesday. Following an initial rally, both stocks and crypto prices retreated as uncertainty loomed over the bank’s timeline for interest rate cuts. The Nasdaq 100 and S&P 500 indices both fell by approximately 0.25%.
Additionally, market participants are closely monitoring the looming triple witching event, where options contracts valued at over $4.5 trillion are set to expire. This quarterly phenomenon often results in increased volatility for both the stock and cryptocurrency markets.