Bitcoin slid toward the $88,000 level on Thursday, remaining under pressure despite a weaker US dollar and a strong rally in gold prices, as investors digested the Federal Reserve’s decision to keep interest rates unchanged.

The world’s largest cryptocurrency fell by about 1% to trade at $88,201.6 by 01:56 a.m. US Eastern Time (06:56 GMT).

Bitcoin has remained range-bound this week, trading between $86,000 and $89,000, posting only modest gains of less than 1% since the start of January.

Bitcoin underperforms despite gold rally and weaker dollar

The subdued performance in cryptocurrencies stood in sharp contrast to the strong rally in the gold market, where prices surged above $5,500 per ounce for the first time on Thursday, supported by robust safe-haven demand, escalating geopolitical tensions, and expectations surrounding Federal Reserve policy.

Although Bitcoin is often described as “digital gold,” it continued to move within a narrow range and failed to benefit from the broader flight to safe-haven assets.

On Wednesday, the Federal Reserve kept its benchmark interest rate unchanged in a range of 3.50% to 3.75%, stepping back after three consecutive rate cuts.

Fed Chair Jerome Powell said policymakers need more evidence that inflation is moving sustainably toward the 2% target before considering further easing, citing continued strength in the labor market and stable economic growth.

Powell’s comments struck a cautious tone, reinforcing expectations that any future rate cuts will be gradual and data-dependent. This weighed on risk-sensitive assets, including cryptocurrencies, as investors reassessed liquidity prospects over the coming months.

White House moves to break regulatory deadlock

In a separate development, Reuters reported that the White House plans to hold a meeting next week with senior executives from the banking and cryptocurrency sectors, in an effort to break a deadlock over key US legislation regulating digital assets.

According to the report, the meeting will be organized by the administration’s crypto council and will focus on contentious provisions related to whether crypto firms should be allowed to offer yields or rewards on dollar-pegged stablecoins.

The move reflects President Donald Trump’s push to advance digital asset legislation after months of disagreement between banks and crypto companies over competitive risks.

The summit could help pave the way toward a compromise on the so-called “Clarity Act,” which aims to establish a comprehensive federal regulatory framework for digital assets.

Crypto advocates argue that offering yields is essential to attract users, while banks warn it could accelerate deposit outflows and threaten financial stability. These concerns have stalled progress on the bill in the US Senate, according to Reuters.

Altcoins continue to retreat

Elsewhere in the crypto market, most major altcoins continued to decline on Thursday amid a broadly risk-averse environment.

Ethereum, the world’s second-largest cryptocurrency, fell about 1.5% to $2,958.92, while XRP, the third-largest digital asset, also slipped 1.5% to trade at $1.88.

Brent crude futures surged on Thursday to their highest levels in four months, driven by mounting concerns over the possibility of a US military strike on Iran, OPEC’s fourth-largest producer, which pumps around 3.2 million barrels per day.

John Evans, analyst at PVM, said that “the immediate concern for the market is the potential for collateral damage if Iran were to strike its neighbors, or more importantly if it were to close the Strait of Hormuz, through which roughly 20 million barrels per day of oil flows.”

Brent crude rose by about $1.65, or 2.4%, to $70.05 per barrel by 13:08 GMT. During the session, prices touched $70.35 per barrel, the highest level since late September. Brent is on track to post monthly gains exceeding 15% in January, marking its largest monthly rise in four years.

US West Texas Intermediate crude also climbed by around $1.59, or 2.5%, to $64.80 per barrel. Earlier in the session, WTI breached the $65 per barrel level, likewise hitting a four-month high. The benchmark is heading for monthly gains of about 13%, its strongest since July 2023.

US President Donald Trump has stepped up pressure on Tehran to halt its nuclear program, warning of possible military strikes, as a US naval group arrived in the region.

Reuters reported, citing informed US sources, that Trump is weighing options that include limited strikes targeting Iranian security forces and leadership, in an effort to spark internal unrest that could lead to the collapse of the country’s rulers.

Some analysts expect further upside in oil prices due to tensions linked to Iran. Citi analysts said in a note on Wednesday that “the probability of an attack on Iran has lifted the geopolitical risk premium in oil prices by around $3 to $4 per barrel,” adding that further escalation could push Brent toward $72 per barrel over the next three months.

Elsewhere, production is gradually resuming at Kazakhstan’s giant Tengiz oil field after electrical fires last week curtailed output, with a return to full capacity targeted within a week.

In the United States, the world’s largest oil producer and top exporter of liquefied natural gas, oil and gas producers have begun restarting wells after disruptions caused by the winter storm “Fern” over the weekend.

Giovanni Staunovo, analyst at UBS, said: “Disruptions in Kazakhstan, whether at the Caspian Pipeline Consortium terminal or at the Tengiz field, removed significant volumes of oil from the market. Combined with cold weather in the US that temporarily curtailed oil production, the oil market has become tighter than previously expected.”

The US dollar edged slightly higher on Thursday, but remained near multi-year lows, as limited support from the Federal Reserve failed to offset persistent concerns over US policy that continued to weigh on investor sentiment.

The dollar ended last week with its largest weekly loss since April, as investors grew increasingly uneasy about their exposure to US assets amid escalating debate over Washington’s stance on Greenland.

US President Donald Trump said on Tuesday that the dollar’s value was “excellent” when asked whether it had fallen too far, a comment that added to pressure on the currency after it touched a four-year low.

The dollar posted gains on Wednesday, snapping a four-day losing streak, after Treasury Secretary Scott Bessent reaffirmed the United States’ preference for a strong dollar policy. However, that momentum failed to carry through into Thursday’s session.

Federal Reserve Chair Jerome Powell indicated that interest rate cuts could take longer to materialize, while some economists argue that the US economy does not currently require further monetary easing.

David Doyle, head of economics at Macquarie Group, said: “While uncertainty remains elevated, particularly with a new Fed chair expected to be appointed in the coming months, our base case is that the rate-cutting cycle has come to an end, with an improvement in the labor market ahead.” He added: “We see the next move as a rate hike, possibly in the fourth quarter of 2026.”

Analysts believe the dollar’s performance will hinge largely on developments surrounding the Federal Reserve’s independence, including an anticipated US Supreme Court ruling on President Trump’s attempt to remove Fed Governor Lisa Cook.

Against a basket of major currencies, the dollar index rose 0.1% to 96.33, hovering near Tuesday’s four-year low of 95.566.

Euro draws renewed ECB attention

The euro eased slightly to $1.1948 after briefly breaking above the $1.20 level on dollar weakness, following warnings from European Central Bank policymakers about the potential deflationary impact of a rapidly strengthening single currency.

Geoff Yu, senior macro strategist for EMEA at BNY, said: “While EUR/USD has remained above the ECB’s baseline scenario over the past year without triggering strong deflationary risks, trade-related uncertainty remains elevated.”

Economists have warned that a stronger euro could amplify deflationary pressures stemming from Chinese exports, potentially prompting the ECB to consider further interest rate cuts.

Yu added that ECB staff projections from December suggest a euro-dollar rate of 1.25 would represent a clear overshoot of the expected range and could be sufficient to alter forward guidance.

ECB Executive Board member Isabel Schnabel said on Wednesday that monetary policy is “in a good place,” indicating that interest rates are likely to remain at current levels for an extended period, with markets pricing in no change until early 2027.

Some strategists, however, argue that the traditional relationship between EUR/USD and interest rate differentials has broken down since Trump took office, warning that any ECB rate cuts may be insufficient to move markets increasingly driven by geopolitical and economic risks rather than relative monetary policy.

Japanese policy under scrutiny

Dollar weakness provided modest support to the Japanese yen, which traded at 153.40 per dollar on Thursday, after moving within a 152–154 range for much of the week.

This followed reports that US and Japanese authorities reviewed exchange rates last week, a step often seen as a precursor to potential market intervention.

Goldman Sachs said in a note that coordination between Japan’s Ministry of Finance and the US Treasury could limit short-term downside pressure on the yen, but cautioned that any impact would be temporary unless supported by fundamental factors, such as faster monetary tightening by the Bank of Japan or tighter fiscal discipline.

Meanwhile, the Australian dollar extended its gains on expectations of a possible local interest rate hike as early as next week, touching a three-year high before stabilizing near $0.7038.

Silver prices rose in the European market on Thursday, extending gains for a sixth consecutive session and continuing to set new record highs, after breaking above the $120 per ounce level for the first time ever. The rally is driven by strong buying interest from retail investors, alongside continued weakness in the US dollar.

In line with market expectations, the Federal Reserve left interest rates unchanged, adopting a cautious tone in its statement and avoiding any clear signals regarding a resumption of the rate-cutting cycle in the near term.

Price overview

• Silver prices today: Silver rose by 3.15% to $120.46 per ounce, the highest level on record, from an opening level of $116.79, after touching a session low of $115.38.

• At settlement on Wednesday, silver prices climbed by 4.15%, marking a fifth consecutive daily gain, supported by sustained safe-haven demand for precious metals.

US dollar

The US dollar index fell by 0.3% on Thursday, resuming losses that had briefly paused in the previous session, and hovering near a four-year low at 95.55 points. The move reflects renewed weakness in the US currency against a basket of major and secondary currencies.

The dollar remains under persistent pressure, as comments from Treasury Secretary Scott Bessent failed to ease growing concerns over US economic policies and geopolitical developments.

On Wednesday, Bessent denied reports suggesting potential US intervention in currency markets, amid heightened speculation surrounding intervention in the Japanese yen and with the US dollar trading at multi-year lows.

Bessent said the United States has long followed a strong-dollar policy, adding that such a policy is based on sound fundamentals. He noted that if fundamentals are strong, capital will flow in, and that efforts to reduce the trade deficit would, over time, naturally support a stronger dollar.

Federal Reserve

At the conclusion of its first monetary policy meeting of the year, and in line with most expectations, the Federal Reserve kept interest rates unchanged at a range of 3.50%–3.75%, the lowest level since September 2022.

The decision was not unanimous, as the Federal Open Market Committee voted 10–2, with two members, Stephen Miran and Christopher Waller, dissenting in favor of an additional 25 basis point rate cut.

The Federal Reserve said available indicators show that economic activity continues to expand at a steady pace, while inflation remains somewhat elevated and labor market indicators point to a degree of stabilization.

Federal Reserve Chair Jerome Powell said current monetary policy is “appropriate,” adding that policymakers are well positioned to determine the pace and timing of any further adjustments to interest rates.

US interest rates

• Following the meeting, and according to the CME FedWatch Tool, market pricing for keeping US interest rates unchanged at the March meeting rose from 82% to 88%, while the probability of a 25 basis point rate cut declined from 18% to 12%.

• Investors continue to price in two rate cuts over the course of the coming year, while the Federal Reserve’s own projections point to a single 25 basis point cut.