On December 19, 2024, Federal Reserve Chairman Powell publicly stated at a press conference after the Federal Reserve's interest rate meeting that the Federal Reserve would not include Bitcoin in its balance sheet because the Federal Reserve Act clearly stipulates that the Federal Reserve cannot hold Bitcoin. Powell's statement triggered a strong reaction in the market. The price of Bitcoin plummeted in just a few hours, and many investors began to question whether the bull market in the crypto market had ended.

Key points from Powell's speech:

The Fed cannot hold Bitcoin: Powell said that the Fed does not intend to include Bitcoin in its balance sheet because the (Federal Reserve Act) stipulates what assets the Fed can hold, and the Fed does not seek to change this legal provision. He also pointed out that this issue should be considered by Congress, and the Fed does not intend to promote changes to the law.

Bitcoin's regulatory issues: Powell emphasized that the Federal Reserve's responsibility is mainly to maintain financial stability and will not actively engage in holding cryptocurrencies. He stated that the current regulatory framework for cryptocurrencies is still under development, and policies should be formulated by relevant regulatory agencies, rather than being led by the Federal Reserve.

Trump's future policies: Powell's remarks are also related to the incoming U.S. President Trump. In January 2025, Trump will officially take office and has repeatedly expressed support for cryptocurrencies during his campaign, having clearly stated he would turn the U.S. into the 'global cryptocurrency capital.' This statement may signify that the U.S. will welcome new changes in cryptocurrency regulation and policy.

Response of the cryptocurrency market:

Powell's speech almost immediately triggered a violent reaction in the market. **Bitcoin (BTC)** quickly fell from around $102,000 to below $95,000, and market sentiment rapidly turned pessimistic, spreading panic among investors and leading to large-scale sell-offs.

Specific market reactions:

Bitcoin (BTC): After Powell's speech, the price of Bitcoin plummeted, dropping from around $102,000 to about $95,000. Market sentiment instantly turned pessimistic, leading to panic selling by investors and causing the price to crash.

Ethereum (ETH): Ethereum also experienced a sharp correction, falling from $4,100 to around $3,100, a drop of nearly 15%.

Altcoins generally fell: Along with Bitcoin's crash, other cryptocurrencies such as BNB, Solana, DOGE, etc., also declined, with some altcoins dropping more than 20%.

End of the bull market?

The violent fluctuations in Bitcoin's price have led investors to question: Has the current bull market come to an end? Although this adjustment has had a significant impact on the market, it does not mean the end of the cryptocurrency market.

Short-term fluctuations do not signify the end of the bull market: The volatility of the cryptocurrency market is inherently high. Although Powell's speech triggered a significant price drop, this is merely a short-term reaction to the news. In the long run, Bitcoin and other cryptocurrencies still hold potential, especially with the ongoing development of global decentralized finance (DeFi) and blockchain technology.

Trump's cryptocurrency policies may bring new opportunities: Trump is about to return to the presidency, and he has expressed a positive attitude towards cryptocurrencies multiple times during his campaign. Trump has clearly stated that he wants to turn the U.S. into the 'global cryptocurrency capital.' This policy could bring new development opportunities for the cryptocurrency market, especially if the U.S. adopts more lenient regulations regarding cryptocurrencies.

Opportunities in market adjustments: Historically, the cryptocurrency market has undergone several significant corrections, and after each adjustment, the market has been able to recover and welcome new growth cycles. The current market adjustment may be an opportunity for long-term investors to reposition themselves.

Summary:

Powell's speech undoubtedly caused a short-term shock to the cryptocurrency market, but that does not mean the end of the bull market. The volatility of the cryptocurrency market is an inherent characteristic, and short-term corrections will not change its long-term development trend. Trump's future policies may bring new growth points to the cryptocurrency market, and the long-term outlook for the market remains optimistic.

For investors, staying calm and adopting a long-term investment strategy may be the best way to cope with the current market volatility. As the trend of global economic decentralization progresses, the cryptocurrency market still holds great potential waiting to be explored.#加密市场回调