Bitcoin Drops Below $94K as Fed Signals and DOJ Bitcoin Sales Weigh Heavy
Bitcoin's price dives as hawkish Fed signals and U.S. government coin sales unsettle investors.
By Tylt Editorial Team
Bitcoin drops 2.1% to $94,471 amid hawkish Federal Reserve outlook.
DOJ to sell $6.5 billion worth of Bitcoin confiscated from Silk Road.
Broader crypto markets face declines, with altcoins showing mixed results.
Bitcoin continued its slide on Thursday, falling 2.1% to $94,471.1 as of early morning trading. The cryptocurrency dropped to an intraday low of $93,323.1, extending its losing streak for the week. The downturn reflects waning risk appetite across markets due to hawkish signals from the Federal Reserve and looming Bitcoin sales by the U.S. Department of Justice (DOJ).
The DOJ recently received court approval to liquidate 69,370 Bitcoin valued at approximately $6.5 billion. These tokens were seized in the 2014 Silk Road crackdown. Historically, large-scale government sales of confiscated cryptocurrency have added significant selling pressure to the market, raising concerns among investors. Coinbase, which has a contract with the DOJ, is expected to handle the sales.
This move also dashed speculation that the U.S. government might retain its Bitcoin holdings under President Donald Trump’s proposed plan to establish a national Bitcoin reserve. While Trump has expressed a desire to create such a reserve, how this goal might be achieved remains uncertain.
Adding to the market pressure, the Federal Reserve released minutes from its December meeting, reaffirming plans to slow the pace of rate cuts in 2025. Policymakers emphasized concerns about inflation, which could remain elevated due to expansionary economic policies. Higher interest rates tend to dampen enthusiasm for speculative assets like Bitcoin, as investors shy away from riskier investments.
Altcoins mirrored Bitcoin's struggles, with mixed performances. Ether held steady at $3,328.41 after earlier losses. XRP rose by 2.2%, reaching $2.3478, marking a modest recovery. However, Solana, Cardano, and Polygon fell between 0.4% and 6%. Meme tokens such as DOGE also faced setbacks, with a 3.1% drop.
The crypto market’s volatile start to the year underscores the challenges facing digital assets, including macroeconomic pressures and regulatory uncertainties. As traders brace for potentially higher interest rates and additional government Bitcoin sales, sentiment around cryptocurrencies remains cautious.
