Bank

Donald Trump

Reserve

<ul class="wp-block-list">
 <li>The President of the Federal Reserve Bank of Cleveland, Beth Hammack cast her vote in favor of keeping the rates unchanged.</li>
 <li>The Chief of Markets at Swiss-based Fintech platform, Ruslan Lienkha opinioned that cryptocurrencies are very unpredictable to function.</li>
 <li>Quicker rate cuts by the Fed would bring more liquidity to the financial system, certainly boosting cryptocurrency value and global interest in the market including Europe.&nbsp;</li>
</ul>
On December 19, the worth of cryptocurrencies went down by 7.5%, soon after a 25 basis point reduction in the federal funds rate by the Federal Reserve Bank of the United States. The fresh target that is set is said to be 4.25%-4.50% in line with expectations. This event has resulted in investors moving away from riskier assets like cryptocurrencies and U.S. stocks.
The officials have assured recently that they are likely to halt rate cuts in 2025, citing a stable labor market and ongoing inflation. Meanwhile, the Fed’s decision was not congenial.
Beth Hammack, President of the <a href="https://news.todayq.com/does-elon-musk-want-to-end-the-federal-reserve-bank/" target="_blank" rel="noopener noreferrer nofollow">Federal Reserve Bank </a>of Cleveland, voted in favor of maintaining the current interest rates. This decision underscored concerns about inflation, which remains above the 2% target and is now expected to persist until 2027. The clarity on legal complications&nbsp; 
The Chairman of the Fed, Jerome Powell’s comment has affected the market. On December 18, at a news conference, he commented that the central bank can not hold Bitcoin and is also not looking for any legislative changes.&nbsp;
On the legal complications of holding bitcoin which has affected the market, Powell made clear “That’s the kind of thing for Congress to hold an opinion, but we are not seeking for any regulatory change at the Fed.”&nbsp;
After this comment, the price of Bitcoin started to decline,which had skyrocketed following the win of Donald Trump in the November 5 election.&nbsp;
The skyrocketing was mostly driven by hope for a more hands-off government approach to assets mainly used for hypothesizing instead of a real currency. Trump has so far revealed his plans to make a US Bitcoin strategic reserve.&nbsp;
But, he has not given any roadmap for the plan. He revealed that it might start with Bitcoin captured from criminals, taking around 200,000 tokens whose worth is estimated to be about $21 billion at current value.&nbsp; Rate cuts could bring more liquidity&nbsp; 
The United States Senator Cynthia Lummis has given a proposal to create this reserve through legislation. This proposal says that the US Treasury would purchase 200,000 bitcoins every year till the amount reaches one million tokens. For funding, Federal Reserve bank deposits and gold reserves would be responsible.&nbsp;
Before this, the price ofBitcoin fell by 3.2% and hovered around $101,127, just a day after hitting $108,000 for the first time ever in history.&nbsp; 
The Chief of Markets at Swiss-based Fintech platform, Ruslan Lienkha opinioned that cryptocurrencies are very unpredictable to function as an intense protection against traditional currencies in developed countries.&nbsp;
At the same time, he further went on to add that they are constantly seen as a long-term hedge against inflation. In this condition, quicker rate cuts by the Fed would bring more liquidity to the financial system, certainly boosting cryptocurrency value and global interest in the market including Europe.&nbsp;

BTC’s price dropped following the Federal Reserve Bank’s comment

Todayq News

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