(Bloomberg) — Bitcoin and the wider cryptocurrency market have made a shaky start to the year, hurt by speculation that the Federal Reserve’s window for further interest-rate cuts is closing.
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The digital asset briefly slid below $90,000 on Monday — a drop of almost 5% compared with the start of 2025 — before a rebound that left it flat for January. Smaller tokens such as Ether are nursing losses for the month so far.
Investors are coalescing around the prospect of a prolonged Fed rate pause due to US economic resilience and the risk of inflationary tariff and immigration policies from President-elect Donald Trump, who will be sworn in next week.
Treasury yields have surged as a result, cooling some of the ardor for crypto sparked by Trump’s vow to make the US the global capital of digital assets by creating friendly regulations and undoing a Biden administration crackdown.
Traders are also dumping stocks as the selloff in Treasuries ripples across global markets. The S&P 500 index, for instance, has erased much of the gain triggered by Trump’s election victory on Nov. 5.
It makes “little sense to try to call a turn until markets get a sense of what the new administration will really mean,” ByteTree Asset Management Chief Investment Officer Charlie Morris wrote in a note. “We can assume it is pro-crypto, but we cannot escape the fact that major financial markets are richly priced, with the tech sector vulnerable to a pullback,” he added.
Bitcoin, which reached a record $108,316 last month, changed hands at about $94,800 as of 9:23 a.m. on Tuesday in Singapore. The token’s advance since Election Day has moderated to roughly 40%.
Many in the crypto community remain optimistic about an enduring boom under Trump. Bitcoin accumulator MicroStrategy Inc. just reported its 10th consecutive weekly purchase of the cryptoasset, taking its stockpile to around $41 billion.
For now, the largest digital asset remains in a “corrective phase,” according to Fairlead Strategies LLC technical analyst Katie Stockton. Chart trends point to the possibility of a test of “downside” support at $87,500, she said.
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