Bitcoin drops below the $88,000 level
The world’s largest cryptocurrency traded 2% lower at $87,850
Bitcoin dropped below the $88,000 level on Thursday, remaining under pressure despite a softer U.S. dollar and a strong rally in gold, as investors digested the U.S. central bank’s decision to keep interest rates steady.
The world’s largest cryptocurrency last traded 2% lower at $87,850 14:49 GMT.
Bitcoin has remained stuck between the $86,000 and $89,000 levels this week. It has added only 1% in January.
The subdued crypto price action contrasted sharply with a surging gold market, where bullion went past the $5,500 an ounce mark for the first time on Thursday. Safe-haven demand and geopolitical tension underpinned the move.
However, Bitcoin, which is often touted as “digital gold,” continued to trade in a tight range.
The U.S. central bank on Wednesday kept its benchmark policy rate unchanged in a range of 3.50%–3.75%, stepping back from three straight rate cuts.
U.S. central bank Chair Jerome Powell said policymakers needed more evidence that inflation was moving sustainably toward the 2% target before considering further easing, pointing to a still-resilient labour market and steady economic growth.
Powell’s comments struck a cautious tone, reinforcing expectations that rate cuts, if they come, are likely to be gradual and data-dependent. That stance weighed on risk-sensitive assets, including cryptocurrencies, as investors reassessed the outlook for liquidity conditions in the coming months.
The White House plans to host senior executives from the banking and cryptocurrency industries next week in an effort to break a deadlock over landmark US crypto legislation, Reuters reported on Wednesday, citing industry sources.
The meeting, convened by the administration’s crypto council, will focus on contentious provisions governing whether crypto firms can offer interest or rewards on dollar-pegged stablecoins.
The summit could help forge a compromise on the bill, known as the Clarity Act, which aims to establish federal rules for digital assets.
Crypto advocates argue that yield payments are critical to attracting customers, while banks warn they could accelerate deposit outflows and threaten financial stability.