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Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, US, on Wednesday, Dec. 18, 2024. Federal Reserve officials lowered their benchmark interest rate for a third consecutive time, but reined in the number of cuts they expect in 2025, signaling greater caution over how quickly they can continue reducing borrowing costs. Photographer: Al Drago/Bloomberg
© 2024 Bloomberg Finance LP
MARKETS STUMBLE POST-FED MEETING
Crypto prices fell sharply after the December 18 FOMC meeting, where the Fed announced its third rate cut of the year, bringing the federal funds rate to a range of 4.25% to 4.5%. However, the markets were unsettled by the Fed’s hawkish outlook, which projected just two rate cuts in 2025—fewer than anticipated—due to concerns over lingering inflation.
Bitcoin has dropped to $97,000 as of Friday afternoon in New York, a material fall from its pre-rate-cut all-time high of $108,135. Ether has shed 13%, while Solana is down 15% and XRP has slid 8%.
Still, the leading cryptocurrency remains up more than 45% since the November 5 election, buoyed by President-elect Donald Trump’s promise to cut regulatory red tape and create a national bitcoin reserve.
ETF EXODUS
Thursday brought the largest one-day outflows from spot bitcoin ETFs since their debut on January 11. Investors yanked $671.9 million, breaking a 15-day streak of inflows. Fidelity’s FBTC led the retreat with $208.5 million in outflows, followed by Grayscale’s GBTC losing $188.6 million, according to Farside Investors. BlackRock’s IBIT, meanwhile, posted its first flat day in weeks.
Ether ETFs also took a hit, recording $60.5 million in net outflows—the first since November 21. Ether prices have shed 20% since hitting $4,100 pre-Fed meeting.
Yet, there’s a silver lining: bitcoin ETF assets under management (AUM) have surged to $129 billion, narrowly overtaking gold ETFs, which stand at $128 billion, according to K33 Research.
YEAR-END TAX STRATEGIES YOU NEED NOW
The IRS is making big changes starting January 1, 2025, and if you don’t prep now, you could pay more in crypto taxes or face penalties. Here’s what you need to do before the year-end to avoid penalties, save money and stay ahead of the game.
A good rule of thumb is to set aside 25% to 30% of your profits in cash or stablecoins to cover the upcoming tax bill. Learn more about this and other tips from our tax expert Shehan Chandrasekera here.
This is the last Crypto Confidential issue of the year. Wishing you joyous holidays and an incredible year ahead!
ELSEWHERE:
CoinDesk Ownership Bullish Fires Top Editorial Staff Amid Newsroom Controversy [Fortune]
Initial Coin Offerings Stage A Comeback In Crypto’s Latest Bull Run [Bloomberg]
Aptos Labs Cofounder Mo Shaikh Steps Down As CEO [The Block]