Bitcoin Under Pressure as Goldman Trims Fed Rate Cut Expectations, BofA Sees Potential Hike After Blowout Jobs Report

Key Points

  • Bitcoin (BTC) dipped below $93,000, marking a 1.6% drop, influenced by reassessments of Federal Reserve rate cuts after a strong jobs report.
  • The CoinDesk 20 Index fell over 3%, with significant losses in major cryptocurrencies like XRP, ADA, and DOGE.
  • Goldman Sachs revised its expectations, now anticipating fewer rate cuts in 2025 due to robust employment data.
  • Bank of America and ING suggest a potential extended pause or even a rate hike by the Fed, influenced by recent economic indicators.

Summary

Bitcoin experienced a downturn at the start of the week, falling below $93,000, as major investment banks like Goldman Sachs revised their expectations for Federal Reserve rate cuts following a robust U.S. jobs report. The report showed a significant increase in nonfarm payrolls and a decrease in the unemployment rate, leading to a reassessment of monetary policy. The broader cryptocurrency market also saw declines, with the CoinDesk 20 Index dropping over 3%. Traditional markets reflected similar concerns, with the S&P 500 futures trading lower and the dollar index nearing a high not seen since late 2022. Goldman Sachs now anticipates only two rate cuts in 2025, a shift from their previous forecast. Meanwhile, Bank of America and ING have expressed concerns about an extended pause or potential rate hikes by the Fed, influenced by recent economic data and upcoming inflation reports. This uncertainty in monetary policy has led to a cautious market sentiment, affecting both cryptocurrency and traditional financial markets.

coindesk
January 13, 2025
Crypto
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