Bitcoin Price Today Holds Steady Above $100K Amid Federal Reserve Rate Concerns
Bitcoin Marginally Drops Amid Rate Jitters Ahead of Federal Reserve Decision
Bitcoin declined slightly on Friday as its rally past key thresholds began to lose steam, and investors were cautious ahead of the decision by the Federal Reserve on an interest rate hike. The macroeconomic signals and policy changes are increasingly influencing the performance of digital currencies.
Recent Rally and Bitcoin’s Marginal Fall
On Thursday, Bitcoin surged sharply after the president-elect Donald Trump reiterated his intention to shift the United States to a first-place role in the world of cryptocurrencies. Initially, this helped boost positive sentiment in markets, but the rally was short-lived as the policy details were left lacking.
But Bitcoin had gone down to about 0.5% by Friday. Trading was at $100,340. It seemed traders had been tempering their optimism as focus had now shifted towards the Federal Reserve decisions on interest rates.
Federal Reserve Decision and its Ripple Effect
The Federal Reserve’s rate decision next week has become a pivotal focus for global markets. The central bank is broadly anticipated to lower interest rates by 25 basis points. However, uncertainty about the Fed’s longer-term monetary policy stance is fostering cautious sentiment.
Recent data revealed that while consumer inflation remains sticky, producer inflation for November exceeded expectations. This has raised doubts about the pace and extent of rate cuts in 2025. Consequently, the U.S. dollar strengthened, applying pressure on risk-driven assets, including cryptocurrencies.
Higher interest rates generally reduce the appeal of speculative investments like Bitcoin and other cryptocurrencies, making it harder for these assets to gain traction in risk-averse environments.
Spot Bitcoin and Ether ETFs Soak in Significant Inflows
Bitcoin might have been on the back foot, but institutional interest in cryptocurrencies seemed to be still strong, according to the data. Spot exchange-traded funds tracking Bitcoin and Ether have absorbed steady inflows in early December, reflecting optimism over more positive crypto regulations under Trump’s incoming administration.
Bitcoin ETFs – On December 12, Bitcoin ETFs recorded their eleventh straight day of inflows. BlackRock’s iShares Bitcoin Trust (NASDAQ: IBIT) stood out the most as it took the lion share of the inflows.
Ether ETFs – Spot Ether ETFs recorded 14 consecutive days of inflows, with BlackRock and Grayscale ETFs taking it by storm.
The inflows are a testimony to the growing interest of institutions in cryptocurrencies as they provide a safer route for investors to adopt digital assets. Spot ETFS were launched in U.S. markets in January this year, and inflows accelerated markedly after Trump’s victory in November.
Altcoins Mirror Bitcoin Losses
The broader altcoin market surrendered some of the gains recorded earlier in the week as it followed Bitcoin’s trend on Friday. However, altcoins had recently outperformed Bitcoin as markets speculated friendlier U.S. regulations might pave the way for more widespread cryptocurrency adoption.
Ether (ETH): Down 0.3% at $3,929.05
XRP: Down 1% at $2.39.
Solana (SOL), Cardano (ADA), and Polygon (MATIC). These all fell between 2% and 4%.
Dogecoin (DOGE). Decreased by 1.3%.
Chainlink breaks the mold with a three-year high
One stock that stood out in the crypto market was Chainlink (LINK), which shot up over 2% on Friday, building on gains made the previous day. The token has advanced more than 20% since Thursday after World Liberty Financial a crypto platform supported by Donald Trump—broadened its investment in the LINK token.
Critical Chainlink developments:
Investment Surge: World Liberty Financial acquired an additional $1 million worth of LINK, bringing their total LINK holding up to $2 million.
Market Milestone: LINK hits $28.3 per token, last seen at that level from late 2021.
World Liberty Financial furthered its investment in Aave’s (AAVE) token with $246,000 increased holdings; currently, it has $1.2 million worth of AAVE. Upon these purchases, LINK has emerged as the platform’s fourth-biggest holding after Bitcoin, Ether, and Tether.
Involvement of World Liberty Financial in Crypto Development
World Liberty Financial, with backing from the Trump family, has become an influential force within cryptocurrency. The platform provides a range of services, such as:
Cryptocurrency borrow and lending
Liquidity pool provision
Stablecoin transaction
The strategic investments in cryptocurrencies such as LINK and AAVE by the platform are ways of strengthening the crypto market. This is all of the action which Trump believes will put the U.S. in the global crypto lead in the long run.
Wider Market Impact
The recent market movements underscore the growing interplay between macroeconomic factors, institutional investment trends, and regulatory developments.
While Bitcoin’s marginal dip highlights short-term market uncertainties, sustained ETF inflows and strategic investments in altcoins like Chainlink point to broader optimism about the future of cryptocurrencies.
While the Federal Reserve rate decision approaches, its impact on the dollar and broader financial markets shall continue to be a key trend influencer.
Institutional adoption via ETFs and entry by platforms such as World Liberty Financial are indeed signs of the maturity of this market, setting it up for long-term growth despite its short-term fluctuations.
Therefore, although Bitcoins and other cryptocurrencies face immediate pressures due to macroeconomic uncertainties, the underlying trends of institutional interest and evolving regulatory frameworks suggest a resilient and evolving market.
