Bitcoin prices swung wildly on December 10, 2025, spiking above $94,000 before retreating to around $92,000 following the Federal Reserve's 25 basis-point rate cut. Chair Jerome Powell highlighted risks in the labor market while cautioning on inflation, contributing to market uncertainty. The broader crypto market added $150 billion in value amid institutional adoption news and short liquidations.
On December 10, 2025, the Federal Reserve cut its federal funds rate by 25 basis points, bringing it within a range of plausible estimates of neutral, as stated by Chair Jerome Powell in his post-meeting press conference. Powell emphasized that the central bank is "well positioned to wait and see" about further rate cuts, noting a "great deal of data" before the January meeting that could influence future decisions. He acknowledged a labor market that might be weaker than previously thought, while stressing that the battle against high inflation is far from over.
The New York Fed announced it would begin purchasing around $40 billion in short-term Treasury bills and securities with maturities up to three years, starting Friday, with purchases to remain elevated for a few months. This marks a shift from the balance sheet reductions of the past three years.
Bitcoin (BTC) reacted sharply, surging to $94,400 during Powell's dovish comments on the labor market before retreating as his hawkish inflation remarks took hold. By late in the day, BTC traded around $92,000, down 0.8% over 24 hours but up about 4% from earlier lows, according to updates. Ether (ETH) showed relative strength, rising 1.1% to $3,290.54, with intraday gains reaching 8.7% to $3,325.99. The total crypto market capitalization increased by $150 billion, or 3%, driven by the rate cut, expectations of macro easing, and $304.3 million in short position liquidations out of $418 million total.
Institutional developments bolstered sentiment: PNC Bank, the eighth-largest U.S. commercial bank by assets, launched direct spot Bitcoin trading for eligible clients via Coinbase's infrastructure, integrating it into their equities and fixed-income platform.
Analysts urged caution. Daniela Hathorn of Capital.com noted the cut does not signal an aggressive easing cycle, depending on inflation and labor data, with two FOMC members voting against it. Brian Coulton of Fitch Ratings expects only two more cuts by June 2026, to 3.25%. David Hernandez of 21Shares said Powell is "threading the needle between their two mandates," and Bitcoin needs ETF inflows to break $94,500 resistance toward $100,000.
