- Bitcoin fell to a low of $74,958 before settling above $75,000.
- This decline also coincided with a scarcity of liquidity in traditional stock markets.
- Cryptocurrency stocks fell sharply as short-term volatility weighed on risky assets.
Bitcoin’s price briefly fell below $75,000 on Wednesday as the Federal Reserve held interest rates steady, dampening hopes for near-term interest rate cuts and triggering a widespread sell-off in risk assets.
The move greatly impacted cryptocurrency-related stocks, with Coinbase, Riot Platforms, and MicroStrategy among the hardest hit.
Bitcoin drops to $75,000 as Fed suspends interest rates
Bitcoin fell to about $75,000, paring its previous gains after the US central bank chose to keep borrowing costs unchanged, indicating a more cautious stance on monetary easing.
The decision reinforced expectations of a higher interest rate environment for a longer period, prompting investors to reduce their exposure to volatile assets linked to speculative growth narratives.
Market data as of this writing showed that over the past 24 hours, Bitcoin registered a modest decline of about 1.4% as it hovered around $75,156.
The combination of high yields and geopolitical uncertainty continued to reduce risk appetite, capping the Bitcoin price below $80,000.
Cryptocurrency stocks stumble amid weak trading signals
The Fed’s hawkish decision extended to cryptocurrency-related stocks, which were already under pressure from disappointing revenue trends.
Robinhood (HOOD) led the decline, falling 14% after reporting a roughly 47% year-over-year decline in cryptocurrency-related revenue in the first quarter.
The sharp contraction was widely interpreted as a sign of weak trading volumes and fading retail enthusiasm for digital assets.
Pessimism spread throughout the sector.
US cryptocurrency exchange Coinbase (COIN) fell 7%, while BLSH, the institutional platform owned by CoinDesk’s parent company, also fell 7%. Gemini (GEMI) stock is down 5%.
Bitcoin mining companies were also sold off, with Riot Platforms (RIOT) and Marathon Digital Holdings (MARA) each falling 4% to 6% as a falling price of Bitcoin and rising energy costs squeezed margins.
MicroStrategy (MSTR), the largest bitcoin holder, fell 4%.
High oil prices increase risk aversion
The deterioration in sentiment extended beyond cryptocurrencies, with US stocks falling broadly and energy prices rising.
The Dow Jones Industrial Average fell more than 300 points, partly hurt by the rise in oil prices that followed President Trump’s comments on Iran.
In an interview on Wednesday with Axios, Trump said he would maintain the US blockade of the Strait of Hormuz until a nuclear-related agreement is reached with Iran, raising concerns about supply disruptions in one of the world’s most important oil corridors.
Brent crude rose more than 4% above $111 a barrel, while US West Texas Intermediate (WTI) crude crossed $106 a barrel, adding to inflation-sensitive market jitters and reinforcing the risk-off tone that has weighed on bitcoin and cryptocurrency stocks.
