---
title: "Why Bitcoin, Ethereum, and Dogecoin All Dropped Today"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/222850378.md"
description: "The recent drop in cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin, follows the Federal Reserve's interest rate cut, which raised concerns about inflation and unemployment. Bitcoin fell 6.2%, Ethereum 9.7%, and Dogecoin 16.8%. The crypto market, often influenced by traditional risk assets, reacted negatively to the Fed's announcement, leading to a sell-off. Speculation around government purchases of Bitcoin and the end of a FOMO cycle contributed to the decline. As 2025 approaches, the market may face fewer supportive factors, impacting future valuations."
datetime: "2024-12-19T21:11:26.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/222850378.md)
  - [en](https://longbridge.com/en/news/222850378.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/222850378.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/222850378.md) | [繁體中文](https://longbridge.com/zh-HK/news/222850378.md)


# Why Bitcoin, Ethereum, and Dogecoin All Dropped Today

The crypto momentum we've seen all fall and early winter hit a big snag over the past 24 hours after the Federal Reserve cut interest rates. That may sound like a good thing on the surface, but as part of the cuts the Fed also said it expects inflation and unemployment to rise more than expected in 2025. Add it up and investors are selling risk assets today.

**Bitcoin** (BTC -4.33%) is the biggest loser, falling 6.2% in the past 24 hours as of 3 p.m. ET and dropping below the $100,000 level. **Ethereum** (ETH -8.55%) is down 9.7% in that time to $3,350 and **Dogecoin** (DOGE -14.44%) is off 16.8% to $0.3032.

## The Fed's impact on crypto

As much as cryptocurrencies have been marketed as a way out from under the traditional financial ecosystem, the crypto market trades a lot like traditional risk assets like growth stocks. In this case, when interest rates rise, growth stocks fall and crypto moves down along with them.

I mentioned that the Fed cut rates yesterday, but the market took the inflation talk as a risk for longer-term bonds, and those yields rose after the announcement. According to Bloomberg, the 10-year government bond rose 6 basis points in the last day and is now up 64 basis points over the past year.

As we saw in 2022, higher rates means lower valuations for cryptocurrencies.

## A FOMO cycle nearing its end?

This current run for crypto started after the election when there was an increase in speculation that President-elect Donald Trump would open up a bull run for the crypto market. And that may happen, but the gains seen didn't line up with any fundamental changes in the industry.

Fear of missing out, or FOMO, drove valuations higher and that FOMO may now be coming to an end.

There was also speculation that Bitcoin, in particular, would be bought by the U.S. government as a reserve or could be used as a reserve by other governments. Fed Chair Jerome Powell was clear the Federal Reserve is not allowed to buy Bitcoin, which could have caused some disappointment.

This looks similar to a "buy the rumor, sell the news" moment in investing, where there's disappointment when results or news comes out, even something as obvious as the Fed not buying Bitcoin.

## Questions heading into 2025

The gains of the last year were largely based on speculation and momentum from items like the approval of exchange-traded funds (ETFs) and the election. But in 2025 there may be fewer of these tailwinds and pricing is driven by the number of new buyers coming into the market, like Bitcoin.

It's also worth noting that **MicroStrategy** has also fallen and its arbitrage strategy makes less sense without a big premium. It's also the biggest individual buyer of Bitcoin in the market, so its multibillion-dollar purchases have been a driver of the price of Bitcoin. And as Bitcoin goes so does crypto, which means everything is lower today.

### Related Stocks

- [Grayscale Bitcoin Trust ETF (GBTC.US)](https://longbridge.com/en/quote/GBTC.US.md)
- [Grayscale Ethereum Staking ETF (ETHE.US)](https://longbridge.com/en/quote/ETHE.US.md)
- [ETH/HKD (ETHHKD.VAHK)](https://longbridge.com/en/quote/ETHHKD.VAHK.md)
- [BTC/USD (BTCUSD.VAHK)](https://longbridge.com/en/quote/BTCUSD.VAHK.md)
- [DOGE/USD (DOGEUSD.VAHK)](https://longbridge.com/en/quote/DOGEUSD.VAHK.md)
- [ETH/USD (ETHUSD.VAHK)](https://longbridge.com/en/quote/ETHUSD.VAHK.md)
- [BTC/HKD (BTCHKD.VAHK)](https://longbridge.com/en/quote/BTCHKD.VAHK.md)

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- [BTC miners are collectively turning to Bitcoin.](https://longbridge.com/en/news/281160892.md)
- [Eightco Reports $326M Total Holdings Including 277.2M Worldcoin, $90M OpenAI Stake](https://longbridge.com/en/news/281191320.md)
- [Zoomex to Attend EthCC Cannes, Focusing on Industry Dialogue and Infrastructure Development](https://longbridge.com/en/news/281313702.md)
- [Bitmine Reports $10.7B Crypto + Cash Treasury, 4.732M ETH and 3.14M Staked ETH via MAVAN](https://longbridge.com/en/news/281024377.md)
- [MiniKit 2.0 launches on World Chain, boosting speed and dev reach](https://longbridge.com/en/news/281216488.md)