Bitcoin’s price fell to $109,000 Wednesday afternoon after Federal Reserve Chair Jerome Powell signaled that additional rate cuts may not follow in December. Since then, Bitcoin price has leveled near $111,000.
The drop came shortly after the central bank reduced its benchmark interest rate by 0.25 percentage points to a target range of 3.75%–4%.
The cut — the Fed’s second of 2025 after a move in September — ended a long stretch of rate holds. The policy shift is intended to lower borrowing costs and support economic activity. But Powell’s comments that further cuts are not guaranteed this year sparked selling across risk assets.
Before the announcement, Bitcoin traded near $116,000 on Monday and briefly dipped below $111,000 early Tuesday. The price briefly bounced on the news before sliding again as Powell spoke. Bitcoin is currently trading near $111,200, according to Bitcoin Magazine Pro data.
During the press conference, as Jerome Powell said that December’s rate cuts aren’t guaranteed, Bitcoin’s price immediately reacted — plunging to $109,000 in a sharp red candle before quickly recovering. The broader crypto market reacted similarly.
Powell said that inflation excluding the impact of tariffs is “not so far” from the central bank’s 2% target, but emphasized that policymakers have “not made a decision about December.” Powell noted that officials held “strongly differing views” during today’s meeting.
Following his remarks, markets sharply trimmed expectations for another rate cut this year. Fed funds futures now price a 71% chance of a December cut, down from about 90% earlier in the day, according to CME data and on prediction markets like Kalshi and Polymarket.
The two-year Treasury yield jumped 9 basis points as traders reassessed the Fed’s near-term trajectory.
Historically, Bitcoin has reacted sharply to monetary-policy changes. After the Fed’s emergency cuts in March 2020, Bitcoin plunged nearly 39% before recovering. When the Fed cut in September 2025, market reaction was limited — suggesting expectations were already priced in.
Bitcoin price as Fed signals end of Quantitative Tightening
Powell also said the central bank is approaching the end of its Quantitative Tightening program, confirming the Fed expects to stop QT by December. This involves letting some holdings of Treasuries and mortgage securities run off the balance sheet as they mature, rather than reinvesting the principal.
QT reduces liquidity by shrinking the Fed’s balance sheet through allowing government bonds to mature without reinvestment or by selling them into the market.
The process has been underway since 2022, removing nearly $1 trillion in securities as part of efforts to fight inflation.
Ending QT would stop that drain on liquidity — a shift many analysts believe could eventually support flows into risk assets, including Bitcoin.
Powell warned, however, that policy will remain dependent on economic data, adding further uncertainty to market expectations.
