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Federal Reserve Chairman Jerome Powell speaks during a press conference following a Federal Open Market Committee (FOMC) meeting on Wednesday, December 18, 2024, in Washington, DC, USA. Federal Reserve officials cut their key interest rate for the third straight day but tapered the number of cuts expected in 2025, signaling greater caution about how quickly they can further reduce borrowing costs. Photographer: Al Drago/Bloomberg
© 2024 Bloomberg Finance LP
Markets stumble after meeting
Crypto prices fell sharply after the FOMC meeting on December 18, where the Fed announced its third interest rate cut of the year, bringing the federal funds rate to a range of 4.25% to 4.5%. However, markets were unsettled by the Fed’s hawkish outlook, which predicted only two interest rate cuts in 2025 – fewer than expected – due to concerns about persistent inflation.
Bitcoin fell to $97,000 in New York on Friday afternoon, a significant drop from its pre-rate cut all-time high of $108,135. Ether is down 13%, while Solana is down 15% and XRP is down 8%.
Still, the leading cryptocurrency has continued to rise more than 45% since the November 5 election, buoyed by President-elect Donald Trump’s promise to cut regulatory red tape and establish a national Bitcoin reserve.
ETF EXODUS
Thursday brought the largest single-day outflows from spot Bitcoin ETFs since their debut on January 11th. Investors withdrew $671.9 million, breaking a 15-day inflow streak. According to Farside Investors, Fidelity’s FBTC led the decline with outflows of $208.5 million, followed by Grayscale’s GBTC with a loss of $188.6 million. BlackRock’s IBIT, meanwhile, posted its first flat day in weeks.
Ether ETFs also suffered a setback, recording net outflows of $60.5 million – the first since November 21st. Ether prices have fallen 20% since reaching $4,100 before the Fed meeting.
Still, there is a bright spot: According to K33 Research, Bitcoin ETF assets under management (AUM) rose to $129 billion, narrowly overtaking gold ETFs at $128 billion.
YEAR-END TAX STRATEGIES YOU NEED NOW
The IRS is making big changes starting January 1, 2025, and if you don’t prepare now, you could pay more crypto taxes or face penalties. Here’s what you need to do before the end of the year to avoid penalties, save money and stay ahead.
A good rule of thumb is to set aside 25 to 30% of your profits in cash or stablecoins to cover the upcoming tax bill. Find out more about this and other tips from our tax expert Shehan Chandrasekera here.
This is the last Crypto Confidential issue of the year. I wish you happy holidays and an incredible year!
ELSEWHERE:
CoinDesk Ownership Bullish lays off top editorial staff amid newsroom controversy [Fortune]
Initial coin offerings are making a comeback in the latest cryptocurrency bull market [Bloomberg]
Mo Shaikh, co-founder of Aptos Labs, steps down as CEO [The Block]
