Bitcoin has fallen sharply on diminished expectations of a rate cut by the US Federal Reserve
US stocks fell on speculation that the Fed will remain cautious about cutting interest rates. The Dow Jones Industrial Average closed at 396.61 points, or 1%, down from the previous trading day at 39,170.24. The S&P 500 was down 37.96 points, or 0.72%, at 5205.81, while the tech-heavy Nasdaq Composite was down 156.38 points, or 0.95%, at 16,240.45. Cryptocurrency markets also fell sharply as expectations of a Fed rate cut faded. Meme coins such as Dogecoin, Sibainu, Doge Whip Hat, Pepe, and Floki, which had surged alongside Bitcoin, all plunged by more than 10%.
Bitcoin was trading at $65,419.14 (average price on major exchanges), down 6.1% from the previous day. Bitcoin dipped below $65,000 at 10:35 p.m. on Feb. 2 and again at 1:05 a.m. the next day, but quickly recovered. Ethereum was also down 6.5% to $3279.33, and Binance Coin was down 4.9% to $549.42. Other cryptocurrencies were down -1.0%, Ripple -4.4%, Ada -4.8%, Dogecoin -10.6%, Sivainu -7.7%, Avalanche -9.4%, Polkadot -6.0%, Tron -3.4%, Uniswap -9.2%, Polygon -5.3%, Litecoin +8.1%, Aptos -14.8%, Cosmos -5.8%, and OKB -6.9%.
"I think the most likely scenario is that inflation will decline to 2 percent over time," Cleveland Federal Reserve Bank President Loretta Mester told CNBC, "but we need more data to increase our confidence." "I don't think we'll have enough information to make that determination until the next Federal Open Market Committee (FOMC) meeting," he added. San Francisco Fed President Mary Daly also played down expectations for a rate cut, saying "three rate cuts is a projection, not a promise."
