Bitcoin (BTC-USD) and Ether (ETH-USD) declined on Thursday despite the Federal Reserve’s interest-rate cut, as Fed Chair Jerome Powell signaled that the central bank will proceed cautiously through 2026.

The Fed on Wednesday lowered the benchmark interest rate by 25 basis points to a range between 3.50% and 3.75%. Although widely expected, the 9–3 split within the FOMC and Powell’s hawkish tone at the press conference weighed on sentiment across digital-asset markets. One member called for a deeper 50-basis-point cut, while two members opposed any reduction at all.

Bitcoin (BTC-USD) fell more than 3% on Thursday, briefly dipping below the 90,000-dollar level before stabilizing around $90,030 at the time of writing. The decline came despite strong inflows into US spot Bitcoin ETFs over the past week.

Ether (ETH-USD) dropped 4% to below $3,200, while XRP (XRP-USD) slid more than 4% as it attempted to hold the $2.00 handle.

Derivatives markets also saw heavy losses, with liquidations totaling $440 million in the hours following Wednesday’s Fed decision, according to Coinglass. Long positions accounted for $334.8 million of the wipeout, while short positions totaled $105 million amid rising volatility.

Fabian Dori, Chief Investment Officer at Sygnum Bank, told Yahoo Finance that crypto markets remain highly sensitive to macroeconomic signals.

He said: “The 25-basis-point cut was largely priced in, but the accompanying narrative matters more for investors navigating an extremely volatile year-end. A hawkish cut isn’t surprising given the Fed’s concern over a cooling labor market and persistently elevated inflation.”

Dori noted that broader economic conditions still support long-term adoption of digital assets. “Liquidity conditions are expected to improve gradually through 2026, and business-cycle indicators continue to show fundamental momentum.”

He added that Bitcoin’s (BTC-USD) recent trading range and market sentiment suggest that much of the leverage washout has already occurred. “On-chain fundamentals, institutional allocation frameworks, and regulatory developments continue to provide medium-term tailwinds. Confidence is the key variable now.”

Fed in a “neutral zone” after three cuts

Powell’s press conference after Wednesday’s FOMC meeting struck a slightly dovish tone, while emphasizing continued caution around inflation risks and labor-market dynamics.

He said the 75-basis-point cumulative cuts since September have placed monetary policy “within the neutral zone,” adding that the central bank is “in a good position to wait and observe how the economy evolves.”

Powell described Wednesday’s rate reduction as “a difficult decision,” saying that “arguments could have been made on either side.” He noted that the gradual cooling of the labor market justified the latest cut.

He added that a substantial amount of new data will arrive before the January meeting, which will inform future policy choices.

The Fed’s projections show that policymakers anticipate only one more cut in 2026 following December’s decision.

Oil prices fell on Thursday as investors shifted their focus back toward peace talks between Russia and Ukraine, while also weighing the potential fallout from the United States seizing a sanctions-hit oil tanker off the coast of Venezuela.

Brent crude futures dropped 81 cents, or 1.3%, to $61.40 a barrel by 09:04 GMT, while US West Texas Intermediate fell 78 cents, also 1.3%, to $57.68.

Russian Foreign Minister Sergei Lavrov said Thursday that US envoy Steve Witkoff’s visit to Moscow this month had resolved a misunderstanding between the two countries, adding that Moscow had delivered its proposals to Washington regarding collective security guarantees.

The benchmarks had closed higher the previous session after the United States said it had seized an oil tanker off Venezuela, reigniting concerns over supply disruptions amid rising tensions between the two countries.

Amrile Jamil, senior oil analyst at LSEG, said that so far the impact of the seizure has not spilled over into the market, but any further escalation would trigger sharp volatility in crude prices. He added that the market remains focused on developments in the Russia-Ukraine peace process.

US President Donald Trump said Wednesday: “We just seized a tanker off the coast of Venezuela — a big tanker, very big — the biggest ever, actually. And other things are happening.”

US officials did not disclose the vessel’s name, but UK-based Vanguard, a maritime risk firm, said the tanker Skipper is believed to have been detained off Venezuela.

Traders and industry sources said Asian buyers are demanding steep discounts on Venezuelan crude, pressured by inflows of sanctioned oil from Russia and Iran, as well as rising loading risks in Venezuela amid a larger US military presence in the Caribbean.

Investors were also focused on the Russia-Ukraine peace talks, as leaders of the UK, France, and Germany held a call with Trump to discuss Washington’s latest efforts to broker a settlement — which they described as a “critical moment” in the process.

A source in Ukraine’s security service (SBU) told Reuters Thursday that Ukrainian drones struck a Russian oil platform in the Caspian Sea for the first time, halting oil and gas extraction at the facility.

Meanwhile, the International Energy Agency raised its forecast for global oil demand growth in 2026 and lowered its expectations for supply growth in its monthly report on Thursday, pointing to a slightly narrower surplus next year.

In other developments, the Federal Reserve — sharply divided — cut its policy rate again. Lower interest rates can reduce borrowing costs for consumers and support economic growth, which in turn can boost oil demand.

The dollar found support on Thursday from broad risk aversion in global markets, but it failed to recover its late-Wednesday losses against peers such as the euro, yen, and sterling, after the Federal Reserve delivered guidance that was less hawkish than some investors had expected.

Asian investors moved out of high-risk assets — including equities and cryptocurrencies — after disappointing results from US cloud-computing firm Oracle (ORCL.N), reigniting concerns that soaring AI-infrastructure costs may outpace the ability to generate profits.

This helped slow the dollar’s decline, which had initially come under pressure following remarks from Fed Chair Jerome Powell that surprised investors who were positioned for a more hawkish tone.

Even so, the wave of risk-driven selling eased somewhat in Europe. The euro traded at $1.1704, steady on the day near a two-month high after gaining 0.6 percent on Wednesday. Sterling also held its ground at $1.13374 after a 0.65 percent rise the previous day.

The dollar weakened further against the yen, slipping 0.14 percent to ¥155.8 after a 0.56 percent drop on Wednesday.

The Fed cut interest rates by 25 basis points on Wednesday, but with the move broadly expected, market reactions reflected the tone of the guidance and the division within the policy committee.

Chris Turner, head of global markets at ING, said investors had been preparing for a “hawkish cut,” but only two members opposed the decision, and the Fed maintained just one rate cut in its median projection for 2026.

He added that Powell also appeared reluctant to endorse the view that the Fed is already in “pause mode.”

Before the meeting, traders were debating whether they might receive a signal similar to those from the Reserve Bank of Australia governor or a key policymaker at the European Central Bank, both of whom suggested the next move could be a hike.

Pressure on the dollar also grew after investors moved into US Treasuries. The Fed announced it will begin purchasing short-term government bills starting 12 December to help manage market liquidity, with the first round expected to include about $40 billion in Treasury bills.

Pressure on the Australian dollar and cryptocurrencies

While major currencies remained focused on the Fed, risk-sensitive assets continued to track weakness in technology shares.

Bitcoin — often viewed as a barometer of risk appetite — briefly slipped below $90,000 and was last down 2.4 percent. Ether dropped more than 4 percent to $3,200.

Gracy Li, CEO of OKX in Singapore, said the decline in cryptocurrencies reflected continued deleveraging since October. “Even with a more accommodative Fed stance, the market is still unwinding excess leverage, so reactions to economic signals are slower than usual,” she noted.

She added that a 25-basis-point rate cut had already been priced in and that the broader economic and geopolitical backdrop remains uncertain, limiting immediate upside.

The Australian dollar also weakened alongside the pullback in risk appetite, dropping 0.5 percent to $0.6644. Pressure increased after data showed Australian employment in November recorded its largest decline in nine months.

Swiss franc rises after SNB decision

The Swiss franc edged higher after the Swiss National Bank kept its policy rate unchanged at 0 percent. The bank said the recent agreement to scale back US tariffs on Swiss goods had improved the economic outlook, even as inflation came in below expectations.

The franc last traded at 0.7992 per dollar after touching its strongest level in nearly a month, and at 0.9348 against the euro.

Gold prices rose in the European market on Thursday, extending gains for a third consecutive session, supported by a weaker US dollar after the latest Federal Reserve meeting delivered a less-hawkish tone than markets had anticipated.

As expected, the Federal Reserve cut its benchmark rate by 25 basis points to a range of 3.75 percent — the lowest since September 2022 — marking a third consecutive rate cut.

Price Overview

• Gold prices today: Spot gold rose 0.45 percent to $4,247.81, from an opening level of $4,228.27, after touching an intraday low of $4,210.44.

• At Wednesday’s settlement, gold gained 0.5 percent, marking a second straight daily advance as investors increased safe-haven buying following the Fed meeting.

US Dollar

The US dollar index fell 0.1 percent on Thursday, deepening losses for a second session, and reached a two-month low of 98.54, reflecting continued weakness in the currency against a basket of major peers.

The outcome of the Fed meeting strengthened expectations for two additional rate cuts next year, compared with the Fed’s median projection of a single 25-basis-point cut.

Nick Rees, head of macro research at Monex Europe, said the most important takeaway was the Fed’s tilt toward easier policy in both the statement and Chair Jerome Powell’s press conference.

Federal Reserve

At the final policy meeting of 2025, the Fed cut rates by 25 basis points to 3.75 percent, as widely expected — the lowest since September 2022 and the third cut in a row.

The vote was not unanimous: nine members supported the cut, two preferred to hold rates steady, and one argued for a larger 50-basis-point move.

The Fed said economic activity continues to expand at a moderate pace, while job gains have slowed and unemployment has edged higher. It also noted that inflation remains elevated.

Economic Projections

The Fed’s quarterly projection report included several key revisions:

• Economic growth: Raised to 1.7 percent for 2025 (from 1.6 percent), to 2.3 percent in 2026 (from 1.8), and to 2.0 percent in 2027 (from 1.9).

• Headline inflation: Lowered to 2.9 percent in 2025 (from 3.0), to a range of 2.4–2.6 percent in 2026, while keeping 2027 at 2.1 percent.

• Core inflation: Lowered to 3.0 percent in 2025 (from 3.1), to 2.5 percent in 2026 (from 2.6), and kept at 2.1 percent for 2027.

• Policy rate: The Fed kept its rate projections unchanged — 3.75 percent for 2025, 3.5 percent for 2026, and 3.25 percent for 2027.

Jerome Powell

Powell said there was “broad agreement” behind the decision, noting that most members supported a 25-basis-point cut and stressing that the Fed remains focused on price stability and maximum employment.

He added that the US economy continues to outperform peers in terms of inflation, labor-market health, and growth. Powell said the Fed does not view rate hikes as a likely scenario going forward, but will adjust policy as data and risks evolve.

Gold Outlook

Tim Waterer, chief market analyst at KCM Trade, said gold’s upside remains limited because the Fed’s underlying message was that any additional cuts would likely be very modest.

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 1.15 metric tons on Wednesday — the fourth daily decline — bringing total holdings to 1,046.82 metric tons, the lowest since 3 December.