Investing.com-- Bitcoin fell on Thursday, extending a run of steep losses as risk appetite was rattled by hawkish signals from the Federal Reserve, while the prospect of coin sales by the U.S. government also weighed.
The world’s largest cryptocurrency largely wiped out a new year rebound this week, tracking broader declines in risk-driven assets as traders braced for a slower pace of rate cuts in 2025.
Broader crypto prices also retreated, although losses on Thursday were more biased towards Bitcoin after reports said the Department of Justice had received court approval to sell coins confiscated from the Silk Road marketplace.
Bitcoin fell 2.1% to $94,471.1 by 00:56 ET (05:56 GMT), and had fallen as low as $93,323.1 earlier in the session.
DOJ gets court approval to sell $6.5 bln Bitcoin
Media reports said that the DOJ had received court approval to sell roughly 69,370 Bitcoin seized from a crackdown on online black market Silk Road in 2014.
The total value of the tokens amounts to about $6.5 billion, and represents a heavy dose of selling pressure on the world’s biggest cryptocurrency.
The DOJ has sold off its confiscated crypto holdings in the past, and was recently seen mobilizing its Bitcoin hoard for a potential sale. Coinbase (NASDAQ: COIN ) has a contract with the DOJ to handle the government’s crypto sales.
The Bitcoin sale also quashed some hopes that the DOJ would convert its Bitcoin holdings into a strategic reserve under incoming President Donald Trump.
Trump has vowed to create a national Bitcoin reserve, although it remains unclear how he will achieve this.
Crypto price today: hawkish Fed signals batter crypto markets
Broader crypto prices fell in tandem with Bitcoin, as risk appetite was eroded by hawkish signals from the Fed.
The minutes of the central bank’s December meeting reiterated the Fed’s plan to cut interest rates at a slower pace in 2025, amid resilience in the U.S. economy and concerns over sticky inflation.
Policymakers were also seen expressing some concerns over inflation remaining underpinned by expansionary and protectionist policies under Trump, which could keep rates higher for longer.
Higher rates bode poorly for speculative assets such as crypto, given that they weigh on investor appetite for risk-driven assets.
Among altcoins, Ether steadied at $3,328.41 after clocking steep losses earlier in the week. XRP rose 2.2% to $2.3478, also recovering mildly from recent losses.
Solana , Cardano , and Polygon fell between 0.4% and 6%, while among meme tokens, DOGE lost 3.1%.