Bitcoin declined on Thursday, halting a short-term rebound seen the previous day, after the Fed October meeting fueled expectations for further interest rate hikes by the central bank.
Mixed quarterly earnings reports from U.S. and Asian technology companies also weighed on investor sentiment, causing the broader cryptocurrency market to fall alongside Bitcoin.
As of 09:14 Moscow time, the largest cryptocurrency by market capitalization had dropped 0.9% to $80,133.1.
The cryptocurrency market fluctuated following the release of third-quarter earnings from Google parent company Alphabet Inc. (NASDAQ: GOOGL) and memory chip giant Samsung Electronics Co. Ltd. (KS: 005930). The resulting sharp decline in their share prices rippled across the broader market.
This created a negative backdrop for cryptocurrencies, as the sector tends to track the performance of technology stocks.
Fed Keeps Rates Steady, but Markets See December Hike as Likely
On Wednesday evening, the Federal Reserve—as widely anticipated by market participants—kept interest rates unchanged at 4.0%, though two members of the 12-person board advocated for a 25-basis-point increase.
Speaking after the meeting, Fed official Kevin Warsh declined to provide clear signals regarding the regulator’s future plans, though he did note the resilience of the U.S. economy, particularly in terms of consumer spending and the labor market. Warsh also reaffirmed the Federal Reserve’s commitment to its 2% annual inflation target.
The markets interpreted the Fed official’s comments as a signal that an interest rate hike is likely in the coming months. The CME FedWatch tool indicated that the market assigns a 79.8% probability to a 25-basis-point rate hike in December, up from 73.4% a week earlier.
Yields on U.S. Treasury bonds also saw a brief uptick following the Fed meeting, with the 10-year Treasury yield once again climbing above the key psychological threshold of 5%.
Rising interest rates tend to weigh on speculative, high-risk assets—such as cryptocurrencies—by increasing the opportunity cost of investing in this sector.
Cryptocurrency market update: Altcoins decline in the wake of Bitcoin
On Thursday, the broader cryptocurrency market trended downward, lacking any positive catalysts to drive the sector.
Ether, the world’s second-largest cryptocurrency by market capitalization, fell 1.5% to $2,316.64, while XRP dropped 2.2%.
Solana lost 1.7% and Cardano declined by 3.6%, whereas BNB performed relatively better, gaining 1.3%.
The memecoins Dogecoin and $TRUMP both saw a decline of 1.6%.