The cryptocurrency market has witnessed a significant downturn in the past week, with Bitcoin (BTC) experiencing its first substantial weekly price drop since Donald Trump’s presidential election win. The decline comes as the United States Federal Reserve’s Federal Open Market Committee (FOMC) reduced the number of projected interest rate cuts for next year from five to two.
Bitcoin’s Price Drop: A Brief Overview
According to TradingView, Bitcoin dropped by 10% on the week ending December 22, closing at $94,645. This marks a decrease of around $10,500 from its starting point of $105,185. The price drop has been attributed to the FOMC’s decision, which suggests that the federal funds rate could stop near 3.9% in 2025 instead of the expected 3.4%. This less favorable economic environment for risk-on assets like Bitcoin has led to a decline in its value.
Bitcoin’s Price Trend Since Trump’s Victory
Up until last week, Bitcoin’s price had risen in six out of the seven weekly closes since Trump’s victory. The only exception was the week ending November 24, when Bitcoin slightly retraced by around 0.78% to $97,280, as shown on CoinMarketCap.
| Week Ending | Bitcoin Price |
| — | — |
| Nov 4 | $105,185 |
| Nov 11 | $108,135 |
| Nov 18 | $107,290 |
| Nov 25 | $97,280 (0.78% retracement) |
| Dec 2 | $104,500 |
| Dec 9 | $106,215 |
| Dec 16 | $105,185 |
Asset Management Firms Predict a Bull Run for Bitcoin
Despite the recent price drop, asset management firms Bitwise and VanEck expect Bitcoin to soar into the $180,000 to $200,000 range in 2025. This prediction is based on several factors, including the potential establishment of a strategic US Bitcoin reserve and further institutional and corporate adoption.
Regulatory Environment: A Friendlier Crypto Landscape Ahead?
The Trump administration’s nomination of Scott Bessent as Secretary of the Treasury and Howard Lutnik to head the Commerce Department suggests a more favorable regulatory environment for cryptocurrencies. Additionally, Paul Atkins is set to replace Gary Gensler as Securities and Exchange Commission (SEC) chair on January 20, marking a significant shift in crypto advocacy within the government.
Atkins’ previous experience as an SEC commissioner between 2002 and 2008 has given industry pundits reason to believe that he will bring about a more welcoming regulatory environment for cryptocurrencies. This, combined with the establishment of spot Bitcoin exchange-traded funds (ETFs), may contribute to a surge in Bitcoin’s price.
Bitcoin’s Price: A Historical Perspective
On Christmas Day last year, Bitcoin was trading around $43,610 as traders speculated whether approved spot ETFs would be given the green light. However, with the FOMC’s decision and the potential establishment of a strategic US Bitcoin reserve on the horizon, Bitcoin’s price may soon reach new heights.
The all-time high of $108,135 set on December 17 was followed by a decline to around $96,073, down by around 11% from its previous peak. This price drop may be attributed to market volatility and uncertainty surrounding the FOMC’s decision.
A New Era for Cryptocurrencies: MicroStrategy Clones and Asian Dominance
The rise of MicroStrategy clones and Asia’s dominance in crypto adoption have been major trends in the industry. As more companies invest in Bitcoin and other cryptocurrencies, the market is expected to grow exponentially. With a friendlier regulatory environment ahead, it is likely that we will see significant price increases in the coming years.
Conclusion
The recent price drop of 10% may seem alarming, but it is essential to consider the broader context. The FOMC’s decision and the potential establishment of a strategic US Bitcoin reserve could be a catalyst for a bull run in 2025. With asset management firms predicting prices above $180,000, it is clear that the cryptocurrency market is poised for significant growth.
As the regulatory environment becomes more favorable, we can expect to see increased institutional and corporate adoption. This will not only drive up prices but also contribute to the stability and legitimacy of cryptocurrencies as a whole. With the rise of MicroStrategy clones and Asian dominance in crypto adoption, it is an exciting time for investors and traders alike.
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