On Wednesday afternoon, Bitcoin’s price dropped to $109,000 following remarks from Federal Reserve Chair Jerome Powell, indicating that further rate reductions may not occur in December. Since that time, it has stabilized around $111,000.
This decline occurred shortly after the central bank lowered its benchmark interest rate by 0.25 percentage points, setting a target range of 3.75%–4%.
The cut, marking the Fed’s second in 2025 after a reduction in September, ended a lengthy period of rate holds. This policy adjustment aims to reduce borrowing expenses and promote economic activity. However, Powell’s statement that additional cuts are uncertain for this year led to selling pressure across risk assets.
Before the announcement, Bitcoin was trading at approximately $116,000 on Monday, experiencing a brief drop below $111,000 early Tuesday. The price saw a momentary increase following the news but declined again as Powell spoke. Currently, Bitcoin is trading around $111,200, according to Bitcoin Magazine Pro data.
During the press conference, Powell’s assertion that December’s rate cuts are not assured caused Bitcoin’s price to react immediately — plummeting to $109,000 in a sudden sharp dip before rebounding. The wider crypto market exhibited a similar response.
Powell mentioned that inflation, excluding tariff effects, is “not so far” from the central bank’s 2% target but stressed that policymakers have “not made a decision about December.” He remarked that officials expressed “strongly differing views” during the meeting.
Following his comments, market expectations for another rate cut this year were significantly reduced. Fed funds futures now indicate a 71% likelihood of a December cut, down from around 90% earlier in the day, based on CME data and prediction platforms like Kalshi and Polymarket.
The two-year Treasury yield surged by 9 basis points as traders reassessed the Fed’s short-term direction.
Historically, Bitcoin has shown a sharp reaction to changes in monetary policy. After the Fed’s emergency cuts in March 2020, Bitcoin plummeted nearly 39% before recovering. In contrast, the market response to the September 2025 cut was subdued, suggesting that expectations were already factored into prices.
Bitcoin price as Fed signals end of Quantitative Tightening
Powell also announced that the central bank is nearing the conclusion of its Quantitative Tightening program, confirming the Fed’s intention to halt QT by December. This entails allowing some Treasuries and mortgage securities to mature without reinvesting the principal, instead of letting them run off the balance sheet.
QT reduces liquidity by shrinking the Fed’s balance sheet via allowing government bonds to mature without reinvestment or by selling them into the market.
This process, which began in 2022, has removed nearly $1 trillion in securities as part of efforts to combat inflation.
Ending QT would cease this liquidity drain — a shift many analysts believe could eventually encourage flows into risk assets, including Bitcoin.
However, Powell cautioned that policy will remain contingent on economic data, adding further uncertainty to market forecasts.
