Today's Bitcoin Performance: Bitcoin Dives Amid Lower Risk Appetite

 

Bitcoin continues losing on Thursday (Jan. 9) because of reduced risk appetite and the prospect of the US government selling tokens.

 

Bitcoin followed broader declines in risk-driven assets instead as traders worried that the Federal Reserve will cut interest rates less often in 2025.

 

Consequently, many cryptocurrencies have retreated. Bitcoin fell even more on reports that the US Department of Justice (DOJ) was allowed to sell Bitcoin seized from the black market by the court.

 

Media reports claimed that the DOJ received court permission to sell about 69,370 bitcoins, worth about $6.5 billion. They were confiscated during a 2014 crackdown on the online black market Silk Road.

 

Meanwhile, because Coinbase $COIN has a contract with the DOJ to handle the government's cryptocurrency sales, coupled with the DOJ's history of dumping seized cryptocurrency, it has been believed that the DOJ will potentially sell off its bitcoin holdings.

 

This potential sale not only depressed Bitcoin's movement but dashed the hopes of some investors that the DOJ would convert its holdings into a strategic reserve to fulfill President-elect Donald Trump's promise of a Bitcoin stockpile.

 

On a macro level, hawkish signals from the Federal Reserve were a bigger driver of the general cryptocurrency decline.

 

The Fed minutes stated that the Fed might reduce the number of interest rate cuts in 2025 to tame persistent inflation.

 

Because policymakers are concerned that the Trump administration's trade policies will sustain inflation, they are likely to keep interest rates high. Higher rates reduce investor appetite for risk-driven, speculative assets, so cryptocurrencies move lower.

 

In today's cryptocurrency market, the world's three major currencies are mixed. As of 03:18 pm SGT., Bitcoin $BTC was down 1.70%. Ether lost 1.37%. XRP bucked the trend and rose 2.48%.