Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies are down sharply after the U.S. Federal Reserve delivered its latest interest rate cut.
The U.S. central bank struck a mostly hawkish tone as it lowered its trendsetting Federal Funds Rate by 25-basis points to a range of 3.50% to 3.75%.
The move, coupled with disappointing earnings from artificial intelligence (A.I.) play Oracle (ORCL), have sent crypto prices spiraling downward.
Bitcoin climbed above $94,000 U.S. shortly after the central delivered its expected interest rate cut, but quickly reversed and dropped to $90,000 U.S.
Ethereum is down 6% in early trading on Dec. 11 and trading at $3,200 U.S. Solana (SOL) and Dogecoin (DOGE) are each down more than 6%.
Analysts say that prices for digital assets are falling as the Federal Reserve’s tone at its latest meeting threw cold water on the odds of further interest rate cuts in the first half of 2026.
Lower borrowing costs typically boost prices for riskier assets such as cryptocurrencies, making them more attractive than lower-yielding alternatives.
However, the U.S. central bank is now forecasting no more than one 25-basis point interest rate cut next year.
Analysts say that a prolonged pause in the rate-cutting cycle is likely to hold back crypto’s recovery.
Bitcoin, the largest cryptocurrency by market capitalization, has fallen more than 30% since mid-October and is down 4% on the year.
