Bitcoin recently experienced a significant weekly decline, marking its first major drop since the post-election rally that drove the cryptocurrency to record highs.
The digital asset, which had been trading at $105,185, saw a decline of approximately 10% by the week ending December 22, closing at $94,645. This decline represents a loss of around $10,500 in value.
The drop in price is attributed to the Federal Reserve's reduction in projected interest rate cuts for the upcoming year, signaling a potentially less favorable economic environment for riskier assets like Bitcoin.
Despite this decline, asset management firms such as Bitwise and VanEck remain optimistic about Bitcoin's long-term potential, projecting that it could reach between $180,000 and $200,000 by 2025. This positive outlook is based on anticipated developments such as increased institutional and corporate adoption of the cryptocurrency and a more supportive regulatory environment under the Trump administration.
The recent volatility in the cryptocurrency market highlights the challenges it faces, but also presents opportunities for growth as the market continues to mature.