Bitcoin and the broader crypto market tumbled on Friday as investors dumped digital assets after the Federal Reserve said it would make fewer interest rate cuts in 2025 than expected.
After reaching an all-time high of $108,000 earlier this week, Bitcoin is down over the last 24 hours to as low as $92,000. Smaller cryptocurrencies including Ethereum and Solana have also taken a big hit.
As an additional indicator of crypto pessimism, spot Bitcoin exchange-traded funds—a group of financial assets that track the price of Bitcoin—have seen record outflows, bleeding $680 million in the last day, according to SoSoValue data.
Brian Rudick, head of research at market maker GSR, told Fortune that concerns about President-elect Donald Trump’s proposed tariff policies leading to increased inflation left the crypto market vulnerable to a selloff that was triggered by the Federal Reserve’s latest meeting.
“The big catalyst was the Fed,” Rudick said.
On Wednesday, the Federal Reserve announced it would cut interest rates for the third time this year. While rate cuts have previously been a boon for digital assets, the Fed also revised the number of rate cuts it expects to make in 2025 from four to two, citing concerns about still-elevated inflation. This led investors to offload risky assets, cashing out on gains before the end of the year and triggering the largest selloff since the November election.
However, Rudick says he doesn’t see this downturn persisting and that if Trump continues to make good on his campaign promises about crypto, like establishing a federal Bitcoin reserve, prices will continue to rise.
“I view this as a healthy correction in the path to eventually and ultimately moving much higher from here,” he said.
Bitcoin and the rest of the crypto market have been on a tear since Trump secured a second term on Nov. 5. His victory signaled a change in regulatory policy to be more crypto-friendly, sending the original cryptocurrency on a march to $100,000, which it achieved on Dec. 5.
While Trump has yet to take office, there has already been a tangible shift toward crypto-friendly regulation. Since the election, anti-crypto SEC chair Gary Gensler has announced his resignation and Trump has selected a number of crypto advocates to head government departments, which has helped to lift the crypto market higher.
This story was originally featured on Fortune.com