Bitcoin Dips Below $100,000

Bitcoin dipped below the $100,000 mark on Wednesday night after U.S. Federal Reserve Chair Jerome Powell commented against establishing a national bitcoin reserve.

According to The Block’s bitcoin price page, the largest cryptocurrency dropped 6% in the past 24 hours, trading at $98,940. Previously, Bitcoin had been above $100,000 for the past week, even setting a new all-time high at $108,135.

Many altcoins also experienced declines on Wednesday, with Ether losing 6.5% and XRP down 12.64%. The GMCI 30 index, measuring the performance of the top 30 cryptocurrencies, fell 7.18% in the last day.

Bitcoin's recent surge was attributed to comments from U.S. President-elect Donald Trump, reinforcing plans to build a national strategic bitcoin reserve. Various U.S. states like Texas, Pennsylvania, and Florida have proposed bills for state-backed bitcoin reserves, boosting positive trader sentiment.

However, during a news conference, Powell stated that the central bank is not allowed to hold bitcoin and is not seeking a legal change regarding a government bitcoin reserve.

Arthur Hayes, former BitMEX CEO and current CIO of Maelstrom, anticipates a significant sell-off in the crypto market around Trump’s inauguration in January, as investors may face the reality of policy limitations. He noted, “The market will instantly wake up to the reality that Trump has at best one year to enact any policy changes on or around January 20th.” This realization could lead to a substantial sell-off in crypto and other affected equities.

Despite the Federal Open Market Committee lowering interest rates by 25 basis points on Wednesday, Powell indicated that future cuts would slow down and described the rate cut decision as a “closer call” than financial markets suggested.

On the same day, the U.S. stock market experienced sharp declines, with the Dow Jones Industrial Average down 2.58%, the Nasdaq Composite down 3.56%, and the S&P 500 Index shedding 2.95%, according to MarketWatch.