Bitcoin’s price fell to $109,000 on Wednesday afternoon after Federal Reserve Chairman Jerome Powell indicated that additional interest rate cuts may not follow in December. Since then, Bitcoin’s price has stabilized near $111,000.
This decline came shortly after the central bank cut its benchmark interest rate by 0.25 percentage points to a target range of 3.75% to 4%.
This cut – the Fed’s second for 2025 after a move in September – ended a long period of interest rate holds. The policy shift aims to reduce borrowing costs and support economic activity. But Powell’s comments that further cuts are not guaranteed this year sparked a sell-off in risk assets.
Before the announcement, bitcoin was trading near $116,000 on Monday and briefly fell below $111,000 early Tuesday. The price bounced briefly after the news before falling again while Powell spoke. Bitcoin is currently trading near $111,200, according to Bitcoin Magazine Pro data.
During the press conference, as Jerome Powell said that December interest rate cuts were not guaranteed, Bitcoin price reacted immediately – falling to $109,000 in a sharp red candle before quickly recovering. The broader cryptocurrency market reacted similarly.
Powell said inflation excluding the impact of tariffs is “not far” from the central bank’s 2% target, but stressed that policymakers “haven’t made a decision for December.” Powell noted that officials had “strongly different views” during today’s meeting.
After his comments, markets sharply reduced their expectations for another interest rate cut this year. Fed funds futures are now pricing in a 71% chance of a rate cut in December, down from about 90% earlier in the day, according to Chicago Mercantile Exchange data and on prediction markets such as Calci and PolyMarket.
The two-year Treasury yield jumped 9 basis points as traders reassessed the Fed’s near-term path.
Historically, Bitcoin has reacted sharply to changes in monetary policy. After the Fed’s emergency cuts in March 2020, Bitcoin fell by approximately 39% before recovering. When the Fed cut interest rates in September 2025, market reaction was limited – suggesting that expectations had already been priced in.
Bitcoin price as Fed signals end to quantitative tightening
Powell also said that the central bank is nearing the end of its quantitative tightening program, stressing that the Fed expects to stop its quantitative tightening program by December. this involves Allowing certain holdings of Treasury securities and mortgage securities to exit the balance sheet as they mature, rather than reinvesting the principal.
The QT policy reduces liquidity by shrinking the Fed’s balance sheet by allowing government bonds to mature without reinvesting them or by selling them in the market.
This process has been underway since 2022, with nearly $1 trillion worth of securities removed as part of efforts to combat inflation.
Ending the QT period would stem the drain on liquidity — a shift that many analysts believe could eventually support flows into risk assets, including Bitcoin.
However, Powell warned that policy would still depend on economic data, adding more uncertainty to market expectations.
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