Bitcoin and other major cryptocurrencies fell sharply Thursday after Federal Reserve Chair Jerome Powell warned investors not to assume another rate cut is guaranteed before year-end. The comments quickly deflated a crypto rally that had built momentum on expectations of a looser monetary policy.

Bitcoin Retreats After Fed Remarks

Bitcoin was trading near $108,620, down roughly 3.8% over the past 24 hours, according to CoinDesk data. Ethereum lost 4.4%, while Solana sank 6.3% and Dogecoin fell 4.7%.

The weakness followed Powell’s statement that the Fed will “take decisions meeting by meeting” and that another cut in December is not a given. The remarks caused traders to reassess expectations, with futures markets now showing just a 70% chance of another rate reduction in December, down from about 90% before Powell spoke, according to the CME FedWatch Tool.

Why Powell’s Comments Hit Crypto So Hard

Cryptocurrency markets thrive on liquidity. Lower interest rates make speculative assets like Bitcoin more attractive by reducing yields on safer investments such as bonds. Rate cuts also tend to weaken the U.S. dollar, which historically supports digital assets.

When Powell downplayed the likelihood of further easing this year, traders saw a signal that liquidity conditions may stay tighter than hoped. That triggered broad selling across risk assets, including equities and digital tokens.

“There’s profit-taking and some de-risking, because those cuts were already priced in. Many investors are taking profits at these resistance levels and reducing exposure until there’s more clarity from both the Fed and the broader global economy,” said Maja Vujinovic, CEO of digital assets firm FG Nexus.

Impact on Crypto-Linked Stocks

Companies with heavy exposure to cryptocurrencies also fell. MicroStrategy (MSTR), which holds more than 200,000 Bitcoin on its balance sheet, dropped about 1.9% in early trading. Coinbase Global (COIN), the largest U.S. crypto exchange, slipped 2.6% as trading volume expectations cooled.

Meanwhile, mining stocks such as Riot Platforms and Marathon Digital were also lower, reflecting how sensitive the sector remains to Bitcoin’s price swings and market liquidity.

The Bigger Picture for Investors

Despite the pullback, Bitcoin remains up more than 90% year-to-date, largely fueled by institutional inflows into spot Bitcoin ETFs and renewed optimism around blockchain’s role in the financial system. Analysts note that volatility is likely to persist through the fourth quarter as traders weigh central bank policy against slowing economic growth.

If the Fed keeps rates elevated longer, crypto markets could see more short-term pressure. But any signs of economic weakness that force the Fed to pivot back to easing could reignite the rally heading into 2026.

Key Takeaway

Investors should expect continued turbulence in digital assets as the market recalibrates expectations for interest-rate policy. Short-term traders may see opportunities in volatility, while long-term holders are likely to focus on accumulation strategies during dips.