The price of Bitcoin (BTC) fell below $104,000 after the Federal Reserve cut 25 basis points.

US Federal Reserve System downloaded its benchmark fed funds rate by 25 basis points to a range of 4.25% to 4.50%, its third consecutive easing step this year and now marking a total rate cut of 100 basis points since September.

Market participants fully expected the central bank’s move on Wednesday, however latest information showed stable economic growth and stable inflation. Today’s focus is on the policy statement, updated economic forecasts and an upcoming press conference with Chairman Jerome Powell to provide an update on the Fed’s thinking on future policy actions.

The Fed’s quarterly economic forecasts – which include a “dot plot” of where the central bank expects the Fed funds rate to fall over time – show that policymakers expect the Fed funds rate to fall to 3.9% by the end of 2025, or another 50 basis points. rate cut points next year. This is higher than the 3.4% forecast in September, which is a sign of looser monetary policy in 2025.

Already at session lows, the price of Bitcoin (BTC) was just above $104,000 in the minutes following the announcement. The S&P 500 index also fell to a session low on Wednesday.

“I think the Fed’s biggest headache right now is that despite the Fed cutting rates, financial conditions are still tight,” Andre Dragos, European head of research at Bitwise, told CoinDesk ahead of today’s event. “Long-term bond yields and mortgage rates have risen since September and the dollar has strengthened, signaling a tightening of financial conditions.

“Sustained growth of the US dollar poses a macro risk for Bitcoin, as the appreciation of the dollar is associated with a reduction in the global money supply, which is bad for Bitcoin and other crypto-assets,” Dragos continued. “Actually the Fed’s net liquidity continues to decline. In my view, the biggest risks to BTC are increased liquidity and a strong dollar… On the other hand, on-chain factors continue to be very supportive for BTC, specifically the balance of exchange, which supports the hypothesis that there is a shortage of BTC supply.” continues to increase.”

Fed Chairman Jerome Powell will hold a post-meeting press conference at 2:30 PM ET, which will provide further signals about the US central bank’s intentions.