Bitcoin Price Plunges as Crypto Traders Get Nervous About Future

Bitcoin plunged more than 4% on Thursday, falling below $106,290 as crypto traders reacted to signals from both the Federal Reserve and President Donald Trump. In short, the crypto world seems anxious about the future.

Bitcoin $ reaches record high125,245 on October 5, prompting many crypto optimists to make wild predictions that it could rise forever. But that line of thinking hasn’t worked in recent weeks, especially after a flash crash two weeks ago that wiped out billions.

The Federal Reserve announced an interest rate cut on Wednesday, setting the benchmark short-term rate between 3.75% and 4%, which The Wall Street Journal Notes are the lowest in three years. That’s exactly what President Donald Trump wanted, as he pressed Powell to cut interest rates since the president’s second term began in January.

Traders liked the cuts, but Federal Reserve Chair Jerome Powell made some uncomfortable on Wall Street when he indicated there was no guarantee of another rate cut when the Fed meets again in December. “Far from it,” Powell said.

President Trump’s meeting with Chinese leader Xi Jinping also weighed on crypto sentiment on Thursday. Trump has announced that tariffs on goods coming from China to the US will be reduced, but they are only falling by 10% from 57% to 47%.

Trump is seen as a positive force by the crypto community, including radical changes scraping The Department of Justice’s National Cryptocurrency Enforcement Team (NCET) which investigates crypto-related crimes. Generally, any market with honest brokers likes to have a cop on the beat to keep things fair and catch bad actors. But Trump is operating from a different perspective, allowing bad actors to flourish under an operating theory known as “who gives you shit, gets yours.”

Trump also pardoned high-profile figures convicted of crypto-related crimes, including the Silk Road founder. Ross Ulbricht and most recently the founder of Binance Changpeng Zhao. Although Zhao has already served his prison sentence, the pardon means he likely won’t have to pay the $50 million he owes.

Bitcoin prices have recovered somewhat since their lows for the day, returning to $107,900 at the time of this writing. But it’s still down more than 5% from where it was a month ago. Compared to a long time, it certainly looks good. A year ago, Bitcoin was trading at $68,500, just before the 2024 presidential election.

Other cryptocurrencies also plunged on Thursday, with Ethereum down 4.3%, BNB down 4%, XRP down 6.7% and Solana down 6.3%.