Bitcoin Trades Lower Amid Fed Rate Cut and Uncertain Outlook
On December 11, 2025, Bitcoin traded lower following a Federal Reserve rate cut and signs of slower future easing. Bitcoin was around $90,118.54, down 2.4% from early Asian hours, while Ether declined about 4% to roughly $3,190. The CoinDesk 20 Index also dropped by more than 4%.
The Federal Reserve cut its benchmark rate by 25 basis points to 3.25% and announced it would purchase $40 billion in short-term Treasuries to manage liquidity in the banking system. This move is distinguished from traditional quantitative easing, which involved buying long-duration Treasuries and mortgage-backed securities to lower yields; the current reserve management program focuses on liquidity support.
Market weakness was attributed to internal divisions within the Fed concerning the balance between inflation control and employment goals, as well as expectations of a more difficult rate-cut path extending into 2026. Among the Federal Open Market Committee members, two voted for no change, six believed a rate cut was not appropriate, and only one more rate cut is anticipated in 2026. Uncertainty surrounding policy direction is expected to persist at least until May 2026.
Complicating the outlook, the potential replacement of Chairman Jerome Powell with an ally appointed by former President Trump could influence rate policy, although the timeline for this change remains uncertain, with roughly six months remaining before May 2026.
Analysts offered perspectives on the developments. Greg Magadini pointed to the mixed signals from the Fed and the unclear future path for rates. Shiliang Tang observed that Bitcoin's price movements corresponded with those of stock markets and noted a decrease in implied volatility following the Fed's announcement.
