The cryptocurrency market experienced selling pressure in the last 24\nhours after the United States monetary authority signalled a tighter\n(hawkish) stance than the market anticipated. In the Federal Open Market\nCommittee (FOMC) meeting that concluded on Wednesday US time, the\nFederal Reserve (The Fed) decided to maintain the benchmark interest\nrate at 3.50% - 3.75%. Although the interest rate level remained\nunchanged, the statements and projections from the new Fed Chair, Kevin\nWarsh, triggered concerns among financial market participants regarding\nthe continuation of global liquidity tightening. Bitcoin (BTC) responded\nto this sentiment with a daily correction approaching 2%, validating\nprojections that the area above $75,000 previously represented a\ntemporary relief rally boundary.<\/p>\n
Based on the latest trading data, Bitcoin (BTC) was traded at\n$64,357.67. The primary crypto asset recorded a daily decline of -1.99%,\nalthough on a weekly basis it still maintained positive growth of\n+3.83%. This selling pressure was directly triggered by the increase in\nUS bond yields following The Fed\u2019s statement. A similar condition was\nexperienced by Ethereum (ETH), which was at $1,748.22, correcting -2.23%\nin the last 24 hours. However, cumulatively over the week, ETH still\nposted a positive performance of +6.84%. This decline reflects investor\ncaution, tending to limit exposure to risky assets.<\/p>\n
In the altcoin sector, Hyperliquid (HYPE) recorded significant\nvolatility. Despite experiencing a daily correction of -4.00% to $71.71,\nHYPE still led weekly gains among major assets with an impressive surge\nof +32.27%. Meanwhile, Zcash (ZEC), which had previously become an\nalternative hedging instrument during heightened geopolitical tensions,\ncontinued its daily decline of -5.78% to $479.74, reflecting adjustments\nin investor capital positioning as the initial draft of a US-Iran peace\nagreement began to move.<\/p>\n
The results of the first FOMC meeting led by Kevin Warsh brought\nseveral structural changes that were carefully analysed by market\nparticipants: The policy of maintaining interest rates at 3.50%-3.75%\nwas taken without dissent. However, the dot plot projections showed a\n9-9 split among committee members, where the median projection now\npoints to a potential 25 bps increase by the end of this year. Warsh\nconfirmed he did not provide personal projections in the Summary of\nEconomic Projections (SEP), consistent with his view that forward\nguidance can limit future monetary policy flexibility. As part of\ninternal reform, The Fed formed five new task forces to evaluate\ncommunication strategy, the balance sheet, data sources, labour\nproductivity, the impact of artificial intelligence (AI), and the\napproach to inflation. Warsh emphasised the committee\u2019s absolute\ncommitment to \u2018price stability\u2019. This hardline stance on inflation was\nimmediately responded to by the bond market, causing the 2-year Treasury\nyield to surge by 14.4 bps. A new communication step was demonstrated\nthrough the FOMC statement text, which was trimmed to just 130 words,\nreducing market interpretation guidance. Beyond the FOMC results,\nWarsh\u2019s statement before the Senate that President Trump never asked him\nto promise a rate cut further reinforced the central bank\u2019s independence\nand strengthened the higher-for-longer interest rate narrative.<\/p>\n
Fundamentally, Warsh\u2019s leadership is expected to have a dual impact\non the digital asset industry. In the short term, tight monetary policy\nis certain to reduce global liquidity, which is the fuel for risky\nassets, thereby depressing Bitcoin\u2019s price. However, for the long term,\nWarsh\u2019s personal view categorising Bitcoin as \u2018digital gold\u2019 and a\n\u2018policeman\u2019 for central bank policy errors is projected to increase\ninstitutional investor confidence in the BTC market structure. Financial\ndisclosures show that the former Morgan Stanley banker has indirect\nexposure to digital assets and Web3 through venture capital investments.\nHis background as an advisor at the Duquesne Family Office owned by\nlegendary investor Stanley Druckenmiller also strengthens his practical\nunderstanding of this new asset class. Although Warsh divested these\nassets to comply with office ethics rules, this track record makes him\nthe first Fed Chair with deep literacy regarding global crypto\narchitecture. Conversely, Warsh\u2019s sceptical attitude towards the\nmajority of altcoins, which he called \u2018software pretending to be money\u2019,\nis expected to weaken institutional capital flows to the non-Bitcoin\nsector, limiting the adoption of speculative instruments without strong\nbasic utility.<\/p>\n
With the market\u2019s focus returning to monetary tightening under The\nFed\u2019s new era, the technical strengthening that occurred some time ago\nis confirmed to have ended. The increasing probability of further rate\nhikes to dampen domestic structural inflation places the risky asset\nmarket in a medium-term downtrend. The strategic projection remains\nunchanged. The primary target for maximum capital deployment is\nconservatively maintained at the price range of $40,000 to $45,000.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/new-fed-era-begins-bitcoin-and-altcoins-bleed-1781769109", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }